KeyBanc maintains Intel stock rating, cites server strength ahead of earnings

Investing.com - KeyBanc has maintained its Sector Weight rating on Intel (NASDAQ:INTC) with a price target of $35.00 ahead of the company’s upcoming quarterly results. The semiconductor giant, currently valued at $176 billion, is trading near its 52-week high of $39.65, having delivered an impressive 95.5% return over the past six months.

With Intel’s earnings report scheduled for October 23, the investment firm expects Intel to report better third-quarter results and provide higher fourth-quarter guidance, driven by broad-based server strength and customer upgrades to its Granite Rapids processors. InvestingPro analysis indicates that while the company isn’t currently profitable, analysts project a return to profitability this year.

KeyBanc’s monthly cloud instance tracker indicates Granite Rapids has shown a meaningful ramp of public cloud deployments in recent months, contributing to the positive outlook.

The firm projects server demand will continue to strengthen into the second half of 2025 despite first-half tariff-related pull-ins, with traditional server upgrades being driven by latest-generation server CPUs from both Intel and AMD.

Regarding Intel’s foundry business, KeyBanc believes manufacturing yields for Intel 18A have stalled at 50-55%, which could delay the volume ramp of Panther Lake processors until the second quarter of 2026.

In other recent news, Intel Corporation has announced the upcoming launch of a new artificial intelligence chip for data centers, named Crescent Island, which is expected to debut next year. This development was unveiled by Intel’s Chief Technology Officer at the Open Compute Summit, marking a significant step for the company in the competitive AI chip market. Additionally, Intel has begun production of its next-generation processor, the Intel Core Ultra series 3, also known as Panther Lake, at its new facility in Chandler, Arizona. This processor, built on Intel’s advanced 18A semiconductor process, is set to enter high-volume manufacturing later this year.

Intel’s foundry business has also secured a major AI client for its advanced 18A/AP manufacturing process, as reported by tech publication SemiAccurate. In terms of analyst activity, Mizuho has increased its price target for Intel to $39.00, citing potential gains from advanced packaging technology. Conversely, HSBC has downgraded Intel from Hold to Reduce, despite the company securing significant investment deals, including $2 billion from SoftBank and $5 billion from NVIDIA.

These developments highlight Intel’s ongoing efforts to strengthen its position in the semiconductor industry through innovation and strategic partnerships.

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