JPMorgan Drops Its Intel Bear Call After Nearly Four Years

Intel (INTC) got a rare vote of confidence from one of its harshest critics on Monday. JPMorgan upgraded the chipmaker to Neutral from Underweight, and the stock jumped nearly 4% in premarket trading.

The call came from analyst Harlan Sur, who has been bearish on Intel since the bank downgraded it in November 2022. His reason for softening now is simple: the stock has come down to meet his price target.

JPMorgan's target is $85, and Sur says the shares are approaching it. Intel has pulled back about 36% from its June peak, he noted, while the broader chip group has slipped a more modest 20% to 25%. At these levels, he wrote, "risk/reward is more balanced."

This isn't a love letter, though. Sur's note, as Investing.com reported, is full of caveats, and the market-share numbers explain why JPMorgan stayed negative for so long.

Since the 2022 downgrade, Intel's share of the server x86 CPU market has fallen from 77% to 53%. Its PC CPU share has dropped from 81% to 68%. Sur expects a few more quarters of share losses, especially in servers.

What changed is execution. Sur credits CEO Lip-Bu Tan with improving results in client and data center computing and in next-generation manufacturing. Intel also has several custom chip (ASIC) projects that lean on its existing technology and factories.

Foundry, the business Intel needs most, is moving in the right direction on paper. Sur sees strong progress on yields, manufacturability and new customer conversations. The revenue is another matter: roughly $1 billion in annualized external foundry sales in the first half of 2026, versus about $150 billion for TSMC.

That gap is the whole debate in one line. Intel's own factories are improving, but it isn't yet a company that big outside customers rely on for leading-edge chips.

"Although [the] turnaround will take years, mgmt execution has been solid, and our confidence is building." — Harlan Sur, Analyst, JPMorgan

Sur also points to a demand tailwind. Agentic AI workloads lean heavily on CPUs, and the supply chain for leading-edge silicon is very tight. He thinks that combination should drive positive earnings-estimate revisions in the coming earnings season and through 2027.

That matters for how you think about Intel. For much of this year the AI trade has been a GPU story. A CPU-driven leg of AI spending would help a company that still sells a lot of processors, and it helps even if Intel never lands a blockbuster foundry customer.

Now the risk side. Sur himself flags "near-term concerns on AI infrastructure spending sustainability," and CNBC's Monday coverage was full of worry about credit stress in the AI build-out. If that trade cracks further, Intel's recent rally could give back more ground, whatever one analyst thinks of the turnaround.

A Neutral rating also isn't a Buy. JPMorgan is saying the stock is roughly fairly priced near $85, not that it's cheap. Anyone chasing the premarket pop is paying for improvement the bank already expects.

For investors already holding Intel, the upgrade removes a prominent bear but doesn't hand you a new catalyst. The next real tests are upcoming earnings, any news on data center CPU roadmaps, and, most important, named external customers for its foundry.

For anyone watching from the sidelines, the numbers to track are server CPU share, foundry revenue outside Intel's own products, and whether Sur's predicted upward estimate revisions show up. Those will tell you more than any rating change.

Bottom line: Intel's turnaround is getting more credit, but it still has to prove it can win customers, not just fix its own factories.