In early April, Intel Corp (NASDAQ:INTC) entered apartnership with Terafab, a collaborative chip manufacturing project between Tesla Inc (NASDAQ:TSLA) and Space Exploration Technologies Corp (NASDAQ:SPCX), which made the company the primary foundry provider to the $25 billion project.
The Terafab partnership strengthens Intel’s AI-driven turnaround and expands long-term upside, according to Tigress Financial Partners.
The Intel Analyst: Analyst Ivan Feinseth reaffirmed a Buy rating and raised the price target from $118 to $145.
The Intel Thesis: The company’s AI-driven turnaround is gaining "strategic credibility," as "several powerful fundamental catalysts" are improving its competitive position "across data-center computing, AI PCs, advanced semiconductor manufacturing, and foundry services," Feinseth said in the note.
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Intel AI inference, agentic computing, data orchestration, networking, and enterprise workloads are increasing the importance of CPUs alongside GPUs, strengthening Intel’s Xeon franchise, the analyst stated. The Xeon 6 and 18A-based Xeon 6+ platforms position the company to capture this growing demand, he noted.
Partnerships with companies like Nvidia Corp (NASDAQ:NVDA), SambaNova, Foxconn, and Siemens (OTC:SIEGY), have expanded opportunities across AI infrastructure, robotics, edge computing, and AI PCs, the analyst added.
Q2 Results As Proof: Intel’s second-quarter results indicate the company’s improving fundamentals, Feinseth said.
- Intel’s revenue grew 25% year-on-year to $16.1 billion, marking the strongest growth in more than 15 years.
- Data Center and AI revenue grew 59% year-on-year to $6.3 billion
- Foundry revenue grew 31% to $5.8 billion
Server volumes increased 9%, while average selling prices rose 48%, reflecting stronger demand for premium processors, the analyst noted.
Terafab-Related Prospects: The Terafab partnership "creates significant long-term optionality across advanced fabrication, packaging, robotics, and AI infrastructure," Feinseth wrote.
While the terms of the partnership are yet to be disclosed, Terafab could provide "external validation of INTC’s engineering capabilities, create a potentially significant advanced-foundry customer opportunity, and increase utilization across its fabrication and packaging network," the analyst added.
INTC Price Action: Intel shares had risen 4.57% to $101.58 at the time of publication on Wednesday.
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