Intel has experienced a massive turnaround in sentiment over the past couple of weeks, first spurred by the Trump administration's purported exhortations to TSMC to get involved in Intel's struggling foundry division either via a technology transfer or by establishing an operational joint venture. More recently, the stock has received another boost, courtesy of the appointment of Lip-Bu Tan as the CEO of Intel.
Now, Bank of America's Vivek Arya is out with his take on this development, adopting an overwhelmingly positive attitude towards Lip-Bu Tan's appointment at the helm of Intel.
To wit, Arya has now hiked his target for Intel shares from $19 to $25. For context, the stock is currently trading at the $23 price handle in early pre-market trading.
Arya says that the analysts at BofA "really like the new CEO appointment," which becomes effective next week, citing:
- Lip-Bu Tan's stellar stint at Cadence Design Systems (CDNS) as the executive chairman, where the stock appreciated by 32x during his tenure vs. the 16x appreciation that the industry-wide SOX index recorded in the same timeframe.
- His extensive knowledge of Intel, courtesy of his prior stint on Intel's board.
- "His breadth of relationships and investments across the US/Asian semi-industry landscape" as the Chairman of the VC firm Walden International.
Of course, Arya does take pains to note the challenges that lie in front of Lip-Bu Tan:
"The upside potential however is balanced against risks from a lack of AI roadmap and increasing competition from ARM-based PC and server CPU rivals, amidst a tough macro environment."
For the benefit of those who might not be aware, the ongoing flux at Intel has attracted a fair share of commentary from Wall Street analysts in recent days.
For instance, when rumors emerged that Intel might spin off its fabs, BofA's Vivek Arya brilliantly laid down the scenario's cons, noting that splitting up Intel "could be time- consuming and complicated given: 1) Extensive approval requirements from global (China) regulators due to INTC’s dominant ~70% share of PC/server CPU, 2) Mismatch between INTC and TSMC’s manufacturing processes, 3) TSMC’s ongoing fab expansion plans in Arizona with ability to serve AI customers, 4) AVGO’s existing low-levered but high debt ($58bn net debt) balance sheet, and 5) Constraints of INTC’s CHIPS Act funding (design needs to own 50%+ of manufacturing) and ROI requirements from co- investment partners Apollo and Brookfield."
Similarly, Lynx Equity issued an equally pertinent when it asked "why would TSM wish to take a stake in Intel’s IFS" given the fact that global fab capacity "at leading and lagging nodes" is no longer in short supply, that Intel's fab business still offers "questionable performance at advanced nodes" and will not break-even until late 2027, and the "IFS’s tortured relationship with the US government via the CHIPS Act?"
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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