Major bank ratings | Bank of America: Intel's first quarter performance and outlook are both solid, target price raised to $56

Gronghui April 27th｜Bank of America Securities released a research report stating that Intel's first-quarter performance and outlook were both steady, benefiting from increased server CPU demand and improved pricing power, which is driving Agentic AI workloads. During the period, gross margin remained at the relatively low level of around 40%, and the company continued to burn cash due to ongoing capacity investments and headwinds from the still-low yield rates of its 18A process; free cash flow for the first quarter was negative $2 billion. The bank raised Intel’s earnings per share forecasts for 2026 to 2028 by 66%, 39%, and 50%, respectively, to $1.04, $1.58, and $2.25. The target price was increased from $48 to $56, but the “underperform” rating was reiterated, considering that the recovery expectations have been fully reflected and the company’s projected annual compound revenue growth rate from 2025 to 2028 is only 10% to 15%, much lower than its peers’ 30% to 40%. At the same time, the foundry business still needs time to prove itself. Within the industry, the bank prefers Nvidia, Broadcom, AMD, and Marvell Technology, which have demonstrated faster growth and execution ability.