TLDR
- Intel stock rose 1.65% in pre-market trading on Monday, opening at $92.32.
- Vivek Arya, an analyst at Bank of America, says Intel’s profits could quadruple over the next three to four years.
- Intel beat Q2 expectations with EPS of $0.42 vs. $0.21 estimated and revenue of $16.13 billion vs. $14.43 billion expected
- OMERS management increased its position in Intel by 63% in the first quarter, purchasing an additional 61,550 shares.
- Analysts carry a consensus rating of “Hold” with an average price target of $107.67
Intel stock rose 1.65% in pre-market trading Monday, to $93.85. The stock opened the session at $92.32, with Nasdaq futures up 1.28% and S&P 500 futures up 0.79%.
The move comes after a strong second-quarter earnings report last Thursday. Intel posted EPS of $0.42, doubling the consensus estimate of $0.21. Revenue was $16.13 billion, well above analysts’ expectations of $14.43 billion.
This revenue figure was up 25.2% year-over-year and represents Intel’s fastest revenue growth in more than 15 years.
Third-quarter guidance also topped estimates, with Intel Expect EPS of $0.38. Management cited continued momentum generated by demand for AI-related server chips and improved foundry execution.
Vivek Arya, a Bank of America Securities analyst, told CNBC on Friday that Intel’s second-quarter results show the company is gaining momentum in AI infrastructure. He cited roughly 59% year-over-year growth in Intel’s core server CPU business as a key driver.
Stronger products, richer product mix and growing demand from agent AI deployments are helping Intel regain its relevance in data centers, Arya said.
He also said that Intel’s position as a leading US-based manufacturer gives it strategic value. Customers devoting hundreds of billions of dollars to AI infrastructure are actively looking for reliable local supplies.
The analyst sees long-term earnings as bullish
While Arya acknowledged that Intel’s valuation may appear stretched in the near term, he said operating leverage from the company’s turnaround could allow earnings to quadruple over the next three to four years.
He added that industry-leading chip and substrate shortages and manufacturing capacity continue to shape customer decisions for Intel.
Arya also highlighted Intel Higher capital spending, strategic hiring, and the hiring of a former SK hynix CEO to boost advanced packaging are signs that management is executing on its long-term plan.
Intel’s future 18A and 14A operations have been identified as potential competitive advantages as the company develops its domestic manufacturing capabilities.
Institutional buying is picking up
On the institutional side, OMERS management increased its position in Intel by 63% in the first quarter, purchasing an additional 61,550 shares. Its total holdings now stand at 159,187 shares worth approximately $7.0 million.
It also added several other institutions to its positions. Sivia Capital Partners raised its stake by 271.7% in the second quarter. NewEdge Advisors increased its position by 29.6%. Sei Investments added 9.9% to its holdings. Institutional investors now own 64.53% of the company’s shares.
On the inside side, EVP April Miller sold 40,256 shares on May 1 at an average price of $99.53, reducing her stake by 27.7%.
The stock carries a consensus rating of “Hold” with an average price target of $107.67. Recent updates include Baird and KeyCorp setting price targets at $125.00, while Morgan Stanley raised their target to $84.00.
Intel has a 52-week low of $18.97 and a 52-week high of $142.35.
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