Intel (NASDAQ:INTC) shares rose about 5% in premarket trading after Bank of America upgraded the stock twice, moving its rating from Underperform to Buy and increasing its price target to $135 from $96.
The investment bank cited improving visibility around Intel’s server processor business and expanding opportunities within its external foundry operations as key reasons for the more optimistic outlook.
BofA Raises Long-Term Earnings Expectations
The upgrade reflects a substantial shift in Bank of America’s view of Intel’s future earnings potential.
The firm now believes Intel could generate earnings of more than $6 per share by 2030, significantly above its previous estimate of $3 to $4 per share.
To arrive at its new target price, BofA applied a 25-times multiple to its projected 2030 earnings-per-share estimate of $6.24 and discounted the valuation back by two years.
Analysts led by Vivek Arya said the bank’s previous sum-of-the-parts valuation framework, which was based on 2028 forecasts, “under-represents many of the company’s CPU and foundry potentials that are further out.”
Server CPU Opportunity Seen Expanding
Bank of America expects Intel’s server CPU business to become a major growth driver over the remainder of the decade.
The analysts forecast server processor revenue exceeding $40 billion by 2030, representing roughly 25% of what they estimate to be a $170 billion total addressable market.
A key component of that outlook is the rise of agentic artificial intelligence, which BofA believes will increase the strategic importance of CPUs.
According to the bank, processors are evolving beyond their traditional role in server management and are increasingly being used to coordinate autonomous AI agents, a market opportunity that could be worth approximately $70 billion by 2030.
Foundry Pipeline Provides Additional Upside
The report also highlighted growing opportunities for Intel’s foundry division.
Bank of America identified several potential projects that could support future growth, including Apple M-Series wafer production, MediaTek TPU wafers, Terafab intellectual property and packaging work, as well as additional ARM-based server CPU programmes.
Analysts also pointed to Intel’s recent intellectual property collaboration with Cadence involving the company’s 14A manufacturing process, describing it as another step toward building a stronger and more sustainable third-party foundry ecosystem.
Low Institutional Ownership Seen as Potential Catalyst
BofA noted that Intel remains significantly under-owned by institutional investors relative to its size.
Despite having a market capitalisation of approximately $540 billion and ranking as the fifth-largest U.S. semiconductor and AI infrastructure company, Intel is held by only 16% of S&P 500 funds.
According to the bank, that makes Intel the second least-owned stock in the peer group behind SanDisk.
The analysts suggested that increased institutional participation could become an additional driver of future share-price appreciation.
Comparison Drawn With AMD
To support its argument, Bank of America pointed to the experience of AMD, where institutional ownership increased by 1,400 basis points over the past year.
During the same period, AMD’s share price rose 309%, illustrating the impact that changing investor positioning can have on semiconductor stocks.
Risks Remain
While maintaining a bullish stance, BofA acknowledged several risks that could challenge its investment thesis.
These include increasing competition from ARM-based processors and custom chip architectures, the possibility of slower AI infrastructure spending, and execution risks associated with ramping up Intel’s next-generation manufacturing technologies.
Despite those challenges, the bank believes improving visibility across Intel’s processor and foundry businesses supports a more constructive long-term outlook for the company.