On Friday, Intel (INTC) shares opened strongly in the green, marking a significant milestone for the Nasdaq-listed firm as it reported its first quarterly profit in nearly two years. Under the leadership of new CEO Lip-Bu Tan, Intel achieved a remarkable turnaround, posting a net income of $4.1 billion for its third quarter, a stark contrast to the over $16 billion loss recorded in the same quarter last year. At its peak during intraday trading, Intel stock surged over 115% above its year-to-date low.
Intel’s impressive Q3 earnings come on the heels of a significant development: Microsoft (MSFT) has reportedly agreed to manufacture its next-generation Maia artificial intelligence (AI) chips using Intel’s advanced 18A or 18A-P process. This partnership, along with recent media reports suggesting that Advanced Micro Devices (AMD) is in preliminary discussions to produce its advanced chips at Intel Foundry, could indicate a promising future for Intel. Ray Wang, chairman of Constellation Research, shared his insights with CNBC today, expressing optimism that Intel might successfully execute its turnaround strategy.
If confirmed, Microsoft’s endorsement of Intel could attract other hyperscalers to the Intel Foundry, positioning INTC stock as a potential long-term winner in the AI sector.
Despite existing challenges, options traders appear to be pricing in a positive outlook for Intel stock in the upcoming months. Data from Barchart indicates that contracts expiring on January 16 suggest the possibility of INTC shares reaching a new high above $45. In the short term, particularly through the end of next week, the anticipated movement is projected at 6.01%, with the upper limit at $40.92 and a lower limit at $36.28. Intel has already garnered billions in commitments from prominent companies such as Nvidia (NVDA), Softbank (SFTBY), and the White House, strengthening its foundry offensive against Taiwan Semiconductor Manufacturing Company (TSM). This support enhances the likelihood of significant upside for this semiconductor stock.
It’s important for investors to be aware that Wall Street remains divided regarding the future of Intel stock as we approach 2026. Currently, the consensus rating for INTC shares is a “Hold,” although price targets have been set as high as $43, suggesting a potential upside of nearly 15% from its current levels. This mixed sentiment reflects the ongoing uncertainty surrounding the semiconductor market but also highlights the potential for growth as Intel continues its strategic initiatives.
