Intel shares exploded 9.27% on June 11, trading 187 million shares—nearly double the daily average. The trigger: Bank of America ripped off the band-aid and issued a double upgrade straight from Underperform to Buy, slapping a $135 price target on the stock.
The move looks overdone for a company with negative net margins and negative free cash flow. It might be. But the Street is starting to price in what Intel has been promising for two years—that its foundry strategy is real, and that AI’s shift from training to inference plays straight into Intel’s x86 core.
Revenue grew 7.2% year-over-year to $53.8 billion, a notable turnaround from the prior decline. Client computing and data center AI drove the rebound. Gross margins remain sub-40% at 37.2%, weighed down by product mix and foundry startup costs. Net margin sits at -5.9%, and free cash flow is deeply negative at -$8.3 billion. That’s the cost of building a foundry business from scratch.
The balance sheet isn’t pretty either. Total debt of $45 billion versus cash of $32.8 billion gives net debt of about $12.2 billion. Debt-to-equity of 36 is high. The current ratio of 2.3 suggests Intel can pay its short-term bills, but the heavy leverage leaves little room for error if the foundry ramp stumbles.
Technically, the picture is cleaner. Price sits above the 20-, 50-, and 200-day moving averages. The chart formed a double bottom near $99, and the June 11 breakout came with conviction. RSI at 48.78 is neutral—not overbought, not exhausted. Support is the $98-100 range; resistance is the May 2026 highs at $132-133. That’s the next target if buyers stick around.
News flow is building. Bank of America’s double upgrade cited AI inference demand as a tailwind for Intel CPUs, raising its server CPU revenue forecast to $40 billion by 2030—well above the Street’s $32.5 billion. The firm also pointed to a new partnership with Cadence Design Systems on the 14A process node as evidence Intel Foundry is becoming a viable TSMC alternative. Google has also been named as a potential foundry customer, adding credibility to the turnaround narrative.
Key Takeaways
Strengths
- Revenue growth recovering to 7.2% YoY, driven by client computing and data center AI
- Strategic pivot to foundry services with new customer announcements (Cadence, Google)
- Dominant market share in client and server CPUs, positioning for AI inference tailwinds
Challenges
- Negative net margins and deeply negative free cash flow from heavy capex
- High debt-to-equity ratio of 36, balance sheet stretched by foundry investment
- Valuation premium (43x EV/EBITDA) leaves no margin of safety if execution falters
Analyst Note
The underlying case for Intel is still a high-wire act. Revenue growth is real. The foundry pivot has momentum. But the stock trades at 43x EV/EBITDA and a forward P/E near 76x. That’s not cheap. If Intel delivers on margin expansion and cash flow improvement over the next two quarters, these multiples will compress and the stock has room to test $132-133. If execution slips—if the foundry customers don’t materialize or margins stay below 40%—the premium valuation leaves the stock exposed to a sharp re-rating. This is a high-conviction buy with a tight leash.
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