Intel shares surged as much as 9 percent this week after Bank of America delivered a rare double upgrade. The move from underperform to buy, paired with a price target jump to $135 from $96, sent the stock rocketing. It also lifted the broader semiconductor sector.
Analyst Vivek Arya cited two powerful forces. First, greater confidence that Intel can capture share in a CPU market expanded by agentic AI workloads. Second, its foundry business stands ready to ease industry bottlenecks in advanced wafers and packaging. Those factors together point to far more earnings power than Wall Street had modeled before.
The reaction spoke volumes. Intel stock climbed nearly 8 percent in a single session, according to Yahoo Finance. The iShares Semiconductor ETF rose more than 8 percent alongside it. Traders who had grown skeptical after years of manufacturing delays suddenly saw a different picture.
Yet this rally did not appear from nowhere. Intel posted first-quarter 2026 revenue of $13.6 billion, up 7 percent from a year earlier. Data center and AI sales jumped 22 percent. Intel Foundry revenue climbed 16 percent to $5.4 billion even as the company reported a $3.7 billion net loss driven by restructuring charges. The numbers revealed progress beneath the red ink.
Progress on the 18A process node anchors much of the optimism. Intel reports defect density already below 0.40 on 18A, with chips powering on, booting operating systems, and yielding well enough to support production plans. The company remains on track for high-volume manufacturing in 2025. Yields have improved steadily since late 2025, though variability persists and full industry-standard levels may not arrive until 2027.
New CEO Lip-Bu Tan has emphasized execution over grand promises. During the first-quarter earnings call he described 2026 as a year of steady delivery rather than explosive growth. That tone seems to have landed well with investors tired of missed targets. And the foundry story gains credibility as external revenue, though still small at $174 million in the quarter, begins to show traction.
BofA now forecasts Intel earnings per share above $6 by 2030. That marks a sharp increase from earlier estimates in the $3-to-$4 range. The higher figures rest on expectations of meaningful share gains in server CPUs and new external foundry customers drawn by 18A’s RibbonFET and PowerVia technologies.
But not every voice on the Street joined the cheer. Northland Securities downgraded Intel to market perform after the recent run-up, warning that valuation had grown rich. Consensus among 31 analysts still sits at hold with an average price target near $77, according to data compiled by Benzinga and other trackers. BofA’s $135 call stands as the street high.
The gap highlights lingering doubts. Intel spent years losing ground to TSMC in manufacturing prowess. Its foundry losses remain substantial. Operating loss at the foundry segment hit $2.4 billion in the first quarter, though that narrowed slightly from the prior period. Scaling external customers while fixing internal cost structures presents a narrow path.
Still, the agentic AI angle adds fresh fuel. As AI systems evolve from simple chatbots to autonomous agents that plan, reason, and act across multiple steps, they demand more sophisticated CPUs. Intel’s x86 architecture and software ecosystem could prove advantageous here. Arya highlighted the potential for a much larger total addressable market in these workloads.
Industry constraints in leading-edge capacity only amplify the opportunity. With TSMC sold out for years on advanced nodes, customers seek alternatives. Intel’s U.S.-based fabs, supported by CHIPS Act funding, suddenly look more strategic. The combination of technical progress on 18A and geopolitical tailwinds has shifted the narrative.
Shares have climbed more than 190 percent so far in 2026. That follows a brutal period when many questioned whether Intel could remain competitive. The stock touched a record high near $133 in May before pulling back. Support held near $100, and the BofA call has now relaunched the uptrend.
Jim Cramer weighed in on CNBC, telling viewers the upgrade demanded attention but advising caution on chasing the momentum. Other analysts point to upcoming product launches, including Panther Lake CPUs built on 18A, as key proof points in the second half of the year.
Execution risk stays real. Yield ramps rarely follow straight lines. Competitive responses from AMD, TSMC, and Broadcom could blunt gains. And the broader semiconductor cycle remains sensitive to any slowdown in AI spending.
Even so, the double upgrade from a previously bearish house carries symbolic weight. It signals that Intel’s long restructuring may finally be bearing fruit. The foundry bet, once dismissed as too little too late, now draws serious capital allocation attention.
Investors will watch quarterly updates closely. Any acceleration in external foundry wins or better-than-expected 18A yields could spark further upgrades. Conversely, slippage on the roadmap would revive old doubts fast.
For now the momentum favors the bulls. A stock once written off has reminded the market why it once dominated the semiconductor world. The coming quarters will test whether this revival proves durable or fleeting.
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