Key insights
- KeyBanc maintains an overweight rating on Intel with a $155 price target, anticipating stronger Q3 results and raised Q4 guidance driven by robust server CPU demand and AI growth. The firm highlighted Intel's expanded foundry pipeline with commitments from major tech companies like Broadcom, Alphabet, Apple, AMD, Microsoft, and Nvidia. Potential opportunities with Anthropic were also noted. KeyBanc identified EMIB-T substrate yields as a risk factor.
Investing.com -- KeyBanc expects Intel to report stronger third-quarter results and raise fourth-quarter guidance, driven by continued strength in server CPU demand, according to a preview released Monday.
The firm anticipates server CPU performance will remain strong as agentic AI demand continues to exceed expectations. KeyBanc projects Intel will support 30-35% unit growth in 2027 despite capacity constraints from insourcing Nova Lake tiles on 18A.
KeyBanc’s third-quarter revenue estimate stands at $16.9 billion with earnings per share of $0.46, compared to consensus estimates of $16.5 billion and $0.40. For the fourth quarter, the firm projects revenue of $18.1 billion and EPS of $0.54, above consensus estimates of $17.1 billion and $0.44.
The firm noted that Intel has expanded its foundry and advanced packaging pipeline with commitments from Broadcom for networking switches, Alphabet for server CPUs, Apple for M/A series chips, AMD for Xilinx FPGAs, Microsoft for server CPUs, and Nvidia for gaming GPUs. Most wins are expected on the 14A process node.
Anthropic represents a potential opportunity of 5 million to 10 million lifetime AI ASIC units, with the company evaluating Intel across front-end and advanced packaging capabilities.
KeyBanc identified EMIB-T substrate yields as a risk factor, with current blended yields of 30-40% versus a 50% target. This could constrain the Humu Fish ramp, now delayed to the second quarter of 2028.
The firm maintained its overweight rating and $155 price target on Intel, based on 10 times enterprise value-to-sales on its fiscal 2027 revenue estimate of $83.6 billion. Intel currently trades at 9.0 times consensus enterprise value-to-sales, compared to a three-year median multiple of 3.1 times.
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