Intel stock surged on June 11 after Bank of America’s analyst Vivek Arya issued a rare double upgrade to Buy from Underperform, lifting his price target to $135 from $96, citing Intel’s growing opportunity to capture market share in server processors and contract chip manufacturing as the AI industry shifts focus.
Intel shares rose 9% on Thursday in response to the upgrade, with the iShares Semiconductor ETF also climbing more than 8%. The move marked an unusually aggressive shift in rating—most analyst changes move a single notch, making a two-rung jump notable in the semiconductor sector.
Arya noted “higher confidence in INTC’s opportunity to help address industry constraints in leading edge wafers and packaging” and capture a “much larger” agentic central processing unit (CPU) market, according to Yahoo Finance. He expects Intel’s server CPU sales to gain roughly 25% of the total addressable market by 2030.
The CPU and Foundry Opportunity
The upgrade rests on two pillars: Intel’s traditional CPU business and its emerging foundry operations. For most of the AI boom, investor focus has centered on graphics processing units (GPUs) used to train large models. BofA’s thesis reflects a shift toward CPUs as companies build “agentic” systems in which software agents carry out tasks independently, requiring more coordination work on central processors.
Bank of America now pegs the server CPU market at more than $170 billion by 2030, up from a prior estimate of around $125 billion, with Intel capturing roughly a quarter of it. This would translate to server CPU sales exceeding $40 billion by 2030, according to multiple sources citing the upgrade.
The foundry business represents an even more aggressive expansion. BofA projects foundry revenue rising from $1.1 billion in 2026 to $47.1 billion by 2030, driven by potential deals with major customers including reported work on Apple’s chips and MediaTek’s processors. This transformation would require Intel’s contract manufacturing segment to scale dramatically from its current position.
The broader earnings impact is substantial: Arya now sees Intel delivering earnings power of more than $6 per share by 2030, roughly double BofA’s prior estimate of $3-4. Intel’s recent results lend some support to the turnaround thesis. In the first quarter of 2026, the company’s data center and AI revenue rose 22% year over year to about $5.1 billion, easily the fastest-growing of its three main segments.
Intel CEO Lip-Bu Tan signaled the shift in recent earnings remarks, stating “In recent months, we have seen clear signs that the CPU is reasserting itself as the indispensable foundation of the AI era,” according to The Motley Fool’s analysis of the upgrade.
Despite the optimism, the stock’s valuation leaves little margin for error. Intel trades at well over 100 times its expected earnings for the next year, and the stock has already more than tripled in 2026 before this upgrade, meaning much of the turnaround narrative is already priced in. The foundry business, while promising, remains in early stages—external foundry revenue was just $174 million in Q1 2026, and the segment continues to post losses as Intel invests heavily in advanced manufacturing capacity.
Sources
- Yahoo Finance — Intel stock move, Vivek Arya upgrade details, CPU market expectations
- The Motley Fool — Detailed analysis of the upgrade thesis, CPU shift, foundry business details, CEO quote
- The Street — Foundry revenue projections ($47.1 billion by 2030), earnings power forecast
- TradingView / GuruFocus — Earnings per share projections, analyst commentary on foundry and CPU opportunities
