RBC reiterates Intel stock rating on AI demand, foundry progress

RBC Capital has maintained a Sector Perform rating on Intel (NASDAQ:INTC) with a price target of $100.00. The firm forecasts Intel to exceed revenue estimates by at least 5% and raise guidance by 3-5% due to strong demand for Agentic AI. RBC expects server CPU volumes to continue growing double-digits through 2027, bolstered by mix and average selling price enhancements.

The company is rapidly expanding wafer capacity for Intel 3 and back-end capacity, which should benefit Intel into 2027. Recent Asian discussions suggest improved availability of Panther Lake CPUs with better 18A yields, despite weak PC demand. Intel is advancing in advanced packaging, with EMIB-T potentially contributing $3 billion to $5 billion in 2028.

Analysts anticipate positive 14A news flow in the near term. Given Intel's valuation at over 40 times its 2027 estimated earnings per share, RBC perceives the stock's near-term risk and reward as balanced. The stock has risen 136% year-to-date, trading at $86.96 with a market cap of $457 billion. Intel is projected to return to profitability this year.

Intel's earnings report is scheduled for October 29, with options data pointing to an 8.3% potential movement. This aligns with a trend of the company exceeding options-implied moves in three of its last eight earnings announcements. Susquehanna analysts see a moderate upside for semiconductor earnings in Q3, with Intel expected to gain from the broader semiconductor upcycle and AI growth.

JPMorgan recently upgraded Intel's stock to Neutral, citing valuation, while TD Cowen keeps a Hold rating using a sum-of-the-parts valuation. Intel CEO Lip-Bu Tan has become an adviser to Ultraviolette, an Indian electric motorcycle maker, as Ultraviolette raised $85 million for capacity and product expansion.