Intel shares rose in pre-open trading after JPMorgan upgraded the stock to Neutral and the company disclosed that Tesla will use its 14A manufacturing process. Analyst Harlan Sur says the full turnaround will take years, but his confidence in the recovery is increasing.
Intel stock is rallying nearly 4.0% in pre-open trading. JPMorgan upgraded the chipmaker from Underweight to Neutral late Friday, citing a more balanced risk/reward profile.
JPMorgan sees a more balanced risk/reward
The bank said shares were approaching its $85 price target after a roughly 36% pullback from the stock's June peak. Sur noted that management has started the turnaround solidly, while AI continues to provide tailwinds for the business.
Sur also argues that Intel's execution under CEO Lip-Bu Tan has improved, particularly in next-generation manufacturing. He expects agentic AI workloads and tight supply of advanced chips to keep lifting earnings estimates through 2027.
However, the analyst remains cautious. He expects Intel to keep losing share in server and PC processors, and he flags its still-small external foundry business.
Tesla commits to Intel's 14A process
Intel also disclosed that Tesla has agreed to use its upcoming 14A manufacturing process as a foundry customer. That makes Tesla the first high-profile external client to commit to Intel's most advanced node.
In a separate update, Intel said output from its current 18A node is running ahead of the company's own internal targets. CEO Lip-Bu Tan had previously warned that the foundry business could be abandoned without external customer wins.
Broader market lends support
The Nasdaq was up 1.1% and the S&P 500 was gaining 0.5%, a risk-on tone that has broadly lifted semiconductor names. Investors are also reassessing the competitive landscape, including AMD and TSMC, after the Tesla-Intel 14A announcement.
Source: Investing.com
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