Intel Could Double in Two Years on Foundry Strength, Melius Analyst Says

Intel Corp. (INTC) shares could more than double from their current levels, according to an analyst at Melius Research who sees immense value in the chipmaker's burgeoning foundry business. In a note to clients, the firm reiterated its Buy rating and a two-year price target of $165, with analyst Ben Reitzes suggesting that "even $200 over 2 years is on the table."

Sum-of-the-Parts Valuation

The bullish outlook is based on a sum-of-the-parts valuation, which separates Intel's core product business from its manufacturing arm. Reitzes argued that both the foundry and product divisions could each be worth well over $80 per share. The $165 price target reflects a 15% to 20% discount to this combined $200 valuation, implying more than 100% upside from Intel's recent price above $97 per share.

"The AI 'puck' has skated toward Intel's foundry asset, in addition to CPUs in general," Reitzes wrote, as reported by Investing.com. He viewed the company's recent $20 billion stock sale, conducted at $95 a share to fund its foundry expansion, as a sign of management's strong conviction in its strategy.

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Foundry's Strategic Importance

The analysis frames Intel's foundry operations—which include its facilities, engineers, and intellectual property—as a critical component of U.S. national security. This importance is magnified by the global concentration of advanced semiconductor manufacturing in Taiwan.

Melius Research suggested the foundry unit could eventually be spun off around 2030 to become a "US Foundry National Champion." The note also pointed to a strong list of strategic supporters for Intel's domestic manufacturing ambitions, including the U.S. government, Nvidia, and SoftBank.