After a nearly 40% decline, JPMorgan upgrades Intel Corporation (INTC.US) to "Neutral": AI computing demand becomes the key to a turnaround.

JPMorgan upgrades Intel Corporation (INTC.US) from "Underweight" to "Neutral," citing improved execution under CEO Lip-Bu Tan and growing demand for AI computing that is expected to support earnings growth. Analyst Harlan Sur said, "Despite near-term concerns about the sustainability of AI infrastructure spending, we believe the increase in agentic AI workloads (CPU-intensive) and the extremely tight supply of leading-edge chips should continue to drive upward revisions to EPS estimates in the upcoming earnings season and through fiscal 2027 (our fiscal 2028 EPS forecast is about 15% above consensus)." Intel Corporation's stock has fallen about 36% from its June high, compared with declines of 20% to 25% for peers. This brings the stock closer to JPMorgan's $85 price target, and its "risk-reward is also more balanced." In premarket trading on Monday, Intel Corporation shares rose 4% to $93.27; on Friday the stock closed down 6% at $89.85. Intel Corporation shares currently trade at about 25 times its fiscal 2028 EPS estimate of $3.60, while peers trade at a P/E of about 24 times. According to JPMorgan, since Lip-Bu Tan became CEO, Intel Corporation has made progress in its core client and data center computing businesses, as well as in manufacturing yields, process technology, and advanced packaging. Intel Corporation may need to raise additional capital, and management has warned that free cash flow will remain under pressure in 2027. But JPMorgan said the risk of further significant shareholder dilution is increasingly reflected in the share price. JPMorgan said Intel Corporation's turnaround will take years. Intel Corporation's foundry business remains small compared with industry leader Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US), with its annualized external foundry revenue in the first half of 2026 still less than $1 billion, versus about $150 billion in annualized revenue for Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR.