Intel Price Target Held at $155 by KeyBanc on Strong Server, AI Demand

KeyBanc has maintained its Overweight rating and $155 price target on Intel (INTC), anticipating the chipmaker will report stronger-than-expected third-quarter results and raise its fourth-quarter guidance. The firm's positive outlook is underpinned by continued strength in server CPU demand, fueled by artificial intelligence applications.

Bullish Forecasts Above Consensus

In a research note, KeyBanc projected that demand for server CPUs will remain robust as what it terms "agentic AI" demand continues to surpass expectations. The firm's financial estimates for Intel are notably above Wall Street consensus.

• Q3 Revenue/EPS: KeyBanc forecasts $16.9 billion and $0.46, compared to consensus estimates of $16.5 billion and $0.40.
• Q4 Revenue/EPS: The firm projects $18.1 billion and $0.54, versus consensus estimates of $17.1 billion and $0.44.

Looking further ahead, KeyBanc expects Intel to support server CPU unit growth of 30-35% in 2027, even with potential capacity constraints as the company insources production of its Nova Lake tiles on its 18A process node.

Foundry Pipeline Shows Promise

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KeyBanc highlighted significant progress in Intel's foundry and advanced packaging business, noting a growing pipeline of high-profile customers. Commitments have reportedly been secured from Broadcom, Alphabet, Apple, AMD, Microsoft, and Nvidia for various products, with most of these wins expected on the future 14A process node.

The firm also pointed to a potential opportunity with AI company Anthropic, which is reportedly evaluating Intel for both front-end and advanced packaging for its AI ASICs. This could represent a lifetime volume of 5 million to 10 million units.

Valuation and Identified Risks

KeyBanc's $155 price target is based on a valuation of 10 times enterprise value-to-sales on its fiscal 2027 revenue estimate of $83.6 billion. The firm noted that Intel currently trades at 9.0 times consensus EV-to-Sales, a significant premium to its three-year median multiple of 3.1 times.

However, the analysis also identified a key risk in the form of yields for its EMIB-T (Embedded Multi-die Interconnect Bridge) substrate technology. Current blended yields are reportedly at 30-40%, below the target of 50%. This could constrain the production ramp for a product code-named "Humu Fish," which KeyBanc noted has been delayed to the second quarter of 2028.