Why Intel Stock Bounced Back Today
Key Points
HSBC analyst Frank Lee doubled his price target on Intel today.
Lee sees billions of dollars of opportunities for Intel in CPUs -- and foundries, too.
- 10 stocks we like better than Intel ›
Intel (NASDAQ: INTC) stock jumped 5.3% through 10:20 a.m. ET Monday. You can thank the friendly analysts at HSBC Bank for that.
This morning, HSBC analyst Frank Lee literally doubled his price target on the semiconductor giant, predicting Intel stock will hit $200 within a year -- and urging investors to buy it.
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Image source: Intel.
Why HSBC loves Intel stock
Intel stock sold off hard at the end of last week, falling nearly 14% from Tuesday's near-all-time high to Thursday's close. But as Lee argues, demand for computer CPUs, both for PCs and to support artificial intelligence inference services (i.e., AI answering questions), is on the rise -- and that's great news for Intel.
Lee's estimating Intel's CPU shipments will rise 30% this year, generating $24.1 billion in revenue, and that this growth will continue into 2027, reaching $33 billion -- about 20% more than anyone else on Wall Street thinks. This is the primary reason he's now coming out with the literal highest price target for Intel of any analyst on Wall Street.
Intel's secret weapon
On top of this, Lee sees foundry services (i.e., manufacturing semiconductors for other companies) contributing meaningfully to Intel's revenue haul in the future. He calls the opportunities at Terafab and Apple (NASDAQ: AAPL) -- and potentially Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Nvidia (NASDAQ: NVDA), too -- "too good to ignore now," and predicts Intel will finally start stealing market share away from Taiwan Semiconductor (NYSE: TSM) this year.
Is he right about all this? It's a bit of a gamble, and with Intel stock trading north of 900 times trailing earnings, there's probably more risk in the stock than reward at these prices.
Gauge your risk tolerance carefully before following HSBC's advice on this one, folks.
Should you buy stock in Intel right now?
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Apple, Intel, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
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