Intel (NASDAQ:INTC) stock is currently in the midst of a historic win streak, and it’s grabbing the attention of everyday investors, some of whom may have been a bit quick to dismiss the lagging chip play way back when it was hovering in its multi-year depths. After gaining for nine straight days, the shares now find themselves up more than 65% year to date.
That’s some serious share price momentum, but what’s more is that Intel’s fundamentals are also experiencing a perfect storm of drivers. As sell-side analysts raise their price targets while the firm continues making smart moves to further improve its positioning for the AI boom, I think it’s time to think of Intel as a serious frontrunner in chips, rather than a legacy chipmaker that fell behind.
Of course, it’s hard to make up ground in the fast-moving world of chips once you’ve fallen behind by some number of months or years. But after winning some big votes of confidence, changing up leadership, and investing in the right areas, Intel is finally starting to show the world that it’s back and probably for good this time.
Intel’s major deals are a big deal
Perhaps the biggest needle-mover has to do with the deals it’s made with other big-tech titans. Whether it’s the investment from Nvidia (NASDAQ:NVDA | NVDA Price Prediction), the expansion of its AI and cloud partnership with Google (whose parent is Alphabet (NASDAQ:GOOG)), or the potentially game-changing deal with Elon Musk and Tesla (NASDAQ:TSLA) to help build the incredibly ambitious Terfab factory, Intel has more than enough luctrative drivers in place, which, in my humble opinion, warrant the latest spike in the valuation.
Some of the bigger bulls out there think there’s more room to run as Intel looks to make history with its latest winning streak. As much as I dislike chasing red-hot stocks, I do think that the potential rewards to be had from Intel’s comeback have the potential to be sizeable as the firm looks to execute on its game plan in the coming years. When it comes to bullish analysts, you really don’t need to look too far.
Benchmark Research is one of the latest to raise the bar on its price target on Intel, with analyst Cody Acree looking to the $76.00 mark for the year ahead. That’s another 17% gain from here, which may very well be realized sooner rather than later, especially as Intel’s latest run-up draws in more attention. So, why the big upgrade after an already sizeable move? Acree likes the company’s “medium-term earnings power.”
Intel’s executing well, and the stock deserves to be rewarded
What’s more, though, is that Acree thinks Intel’s “execution is improving fast enough to matter.” That’s the key takeaway here, in my view. Not only does Intel have a plan and great managers who can get the job done, but they’ve arguably already shown that they can execute well and quickly. In an era of AI bottlenecks and delays, staying on course or slightly ahead of schedule is absolutely critical to becoming a force again in CPUs.
Beyond Intel’s latest chips and their strengths, I think the foundry business is what could keep the company running strong for years to come. It’s no longer just an expensive endeavor that won’t pay out dividends until way out into the future.
America’s answer to Taiwan Semi? That doesn’t sound so far-fetched anymore
The company might actually be a reliable fab that’s America’s answer to Taiwan Semiconductor (NYSE:TSM). In my view, Intel’s work on the Terafab is perhaps the biggest vote of confidence from any company to date.
Elon Musk is profoundly ambitious, and he knows what it takes to get the job done. Given what’s on the line, he wouldn’t team up with a firm if there were any big doubts about execution.
And, in my view, I think the Terfab deal solidifies Intel as a foundry titan whose moat will only grow wider with every big project it tackles. The initial reaction in Tesla and Intel shares, I think, speaks to the partnership’s game-changing potential and the major benefits to be enjoyed by the two.
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