Intel shared encouraging updates around its PC-chip business this week, but any turnaround for the chip maker is still years away.
As Intel's stock sealed its highest close since March 2024, some on Wall Street aren't sure the momentum is sustainable.
Among institutional investors, the stock is a "name that few talk about owning or wanting to buy," making the momentum look mostly retail-driven, Mizuho trading-desk analyst Jordan Klein said in a Friday note.
Intel shares finished the week up 15.7%, partly reflecting enthusiasm around the company's Core Ultra Series 3 processors, known as Panther Lake, which Klein said were being "talked up a ton by the company" at the CES electronics trade show earlier this week. The personal-computer chips are the first to be designed on Intel's 18A process, "the most advanced semiconductor process ever developed and manufactured in the United States," according to the company.
"But who really wants and needs a new PC right now?" Klein asked. Rising prices for memory components put Intel's PC business at risk, he noted, while the "slow yield ramp" of 18A has made it difficult for Intel to meet customer demand for its PC products.
While the company's "bullish talk" on improvements in its chip architecture and upcoming 14A process node "is wonderful," Klein said those developments are still "several years away" - a timeline, he noted, that investors already understand.
Intel needs external foundry customers to make the stock work, Klein said, and the "hope trade" depends on President Donald Trump ensuring that it gets them.
Trump touted "a great meeting" with Intel CEO Lip-Bu Tan in a Truth Social post on Thursday, in which he also commended the Panther Lake launch.
"The United States government is proud to be a shareholder of Intel, and has already made, through its U.S.A. ownership position, tens of billions of dollars for the American people - in just four months," Trump wrote.
Klein said he will "remain skeptical" at the stock's current price, which was $45.55 as of Friday's close.
Despite a successful ramp-up of 18A, Intel's commentary that it doesn't plan to "build ahead" on the 14A process until it has a major customer pushes "the window for 14A design wins (and thus customer buy-in)" to the middle of this year into 2027, Deutsche Bank analyst Ross Seymore said in a Thursday note. Therefore, revenue won't be expected until at least 2028, he added.
In the meantime, Seymore said investors should watch for possible customer endorsements of 14A, investments into the chip maker by customers "and eventually a substantial" increase in Intel's guidance for its capital expenditures for 2027. That could come in the form of expanding its facility in Ohio to meet demands of "any large foundry win," he wrote.
Seymore said he's "encouraged" by updates on 18A and "stronger-than-expected end-market demand" for Intel's PC and server central processing units. However, he's still "cautious" about the time it could take for the business to turn around "given the massive undertaking required on both the products and foundry side."
