Intel’s stock has been on an absolute tear lately—we’re talking more than tripled since late March. Someone definitely found the “stock goes up” button and decided to just… leave it pressed. But here’s the thing: not everyone’s convinced this rocket ship is headed to the moon.
The latest catalyst? A Wall Street Journal report that Apple and Intel are in preliminary talks about Intel manufacturing certain chips for Apple devices. After more than a year of negotiations, this could be huge. We’re talking potentially enormous. Bank of America analyst Vivek Arya ran the numbers and figured out that if this deal actually happens, it could represent a $35-40 billion addressable market for Intel. Even capturing just 25% of that pie could mean over $10 billion in annual revenue down the line.
Sounds amazing, right? Here’s where it gets interesting.
Arya thinks even if Apple and Intel announced a formal deal tomorrow morning, we’re probably looking at another two to three years before any real production volumes show up. We’re talking capex expansion, qualification, tapeout—all the unsexy stuff that happens behind the scenes. And here’s the kicker: when those new fabs finally do start ramping up, they’re probably going to crush Intel’s gross margins. Depreciation, ramp-related expenses, lower yields—it all adds up to a margin headache. Intel’s been talking about hitting foundry operating margin breakeven by 2027, but Arya thinks that target might slip by another year or two.
So what’s Arya doing with his Intel model? He’s not baking in the Apple deal yet. Too much uncertainty. But he’s not ignoring the potential upside either. He also raised his long-term server CPU market outlook from around $80 billion to $120 billion by 2030, which is pretty bullish.
The result? Arya bumped his price target from $56 to $96. Sounds great until you realize that’s still about 23% below where Intel’s trading right now. Yeah, he gave it an Underperform rating. Translation: sell.
Among his analyst buddies, two others are in the bear camp. Then there’s 23 Holds and 11 Buys, which averages out to a Hold consensus. But here’s the real tell: the average price target across all analysts sits at $81.41—that’s 37% below the current price. Wall Street’s basically saying, “Yeah, this is cool, but you’re paying too much.”
The bottom line? Intel’s got some genuinely exciting stuff happening. The Apple deal could be transformative. The server market is growing. But the stock’s already priced in a lot of that optimism. Sometimes the best companies make the worst stocks when everyone’s already bought in. Intel might be one of those situations right now.
