Intel shares climbed in Monday premarket trading after JPMorgan raised its rating on the chipmaker to neutral from underweight, arguing that rising agentic AI workloads and a tight supply of leading-edge silicon should keep pushing earnings estimates higher.

The stock rose about 4% to $93.27 ahead of the opening bell, according to market data, after closing at $89.85 on Friday. The upgrade lands as semiconductor shares broadly rebound from their steepest weekly decline in months.

JPMorgan analyst Harlan Sur wrote that Intel’s risk/reward profile has become “more balanced at current levels” as the shares approach the bank’s $85 price target. Intel has fallen roughly 36% from its June peak, compared with a 20% to 25% pullback across the wider chip group, leaving less downside left to price in.

“Despite near-term concerns on AI infrastructure spending sustainability, we believe increasing agentic AI workloads (CPU intensive) and a very tight supply chain for leading edge silicon should drive continued positive EPS revisions in the upcoming earnings season and through CY27,” Sur wrote in the note.

The bank’s fiscal 2028 earnings estimate sits about 15% above the consensus. At current levels, Intel trades at roughly 25 times that $3.60 per-share projection, against a peer multiple of about 24 times.

Sur credited Chief Executive Lip-Bu Tan with improving execution since taking the top job, pointing to progress in the core client and data center compute businesses as well as in manufacturing yields, process technology and advanced packaging. He also flagged several ASIC initiatives that draw on Intel’s intellectual property and fabrication capabilities.

The upgrade does not paper over Intel’s competitive erosion. Since JPMorgan cut the stock to underweight in November 2022, Intel’s share of server x86 CPU revenue has slid from 77% to 53%, and its PC CPU share has fallen from 81% to 68%. Sur expects a few more quarters of share losses, particularly in server processors.

Foundry remains the long pole. Intel generated barely $1 billion in annualized external foundry revenue in the first half of 2026, against about $150 billion for Taiwan Semiconductor Manufacturing Co. (TSM). JPMorgan said the turnaround will take years.

Capital intensity is another overhang. Management has warned that free cash flow will stay under pressure in 2027, and additional fundraising may be needed. The bank, however, said the risk of further significant shareholder dilution is increasingly reflected in the share price.

The upgrade fed into a broader recovery in chip stocks. The iShares Semiconductor ETF (SOXX), the largest fund tracking US chip companies by assets, gained 3.6% in premarket trading after losing almost 12% last week. Nvidia (NVDA) added 1.9%, Advanced Micro Devices rose 3.5%, Marvell Technology climbed 4.7% and Broadcom gained 3.5%. Memory maker Micron Technology advanced 3.6% following a 14.6% drop, while Sandisk, Western Digital and Seagate Technology all moved higher. Analog names joined in, with Texas Instruments up 2.4%, Analog Devices 2.9% and ON Semiconductor 3%.

The Philadelphia Semiconductor Index fell 11.4% last week, its worst weekly performance since March 2025, and had dropped for eight straight sessions through Friday’s close, erasing about $2 trillion in market value. Despite that rout, the index remains up 57.2% year to date.

Last week’s selling was driven by hot inflation data that raised the odds of Federal Reserve rate hikes and by doubts over whether heavy AI spending will pay off. Those pressures eased Monday as Brent crude fell 1.8% to around $107 a barrel and the 10-year Treasury yield slipped to 5.085%. Nasdaq 100 futures were up 0.99%.

Intel separately said Monday that its Xeon processors and forthcoming GPU D-series now offer day-0 support for Meta Platforms’ (META) Muse Spark Open, an 816 billion-parameter model focused on coding, debugging and automated workflows. The company said it tested the model on four GPU D-series cards, each carrying 160 GB of memory, in an air-cooled design intended for conventional data centers. No customer commitments, revenue expectations or commercial launch date were disclosed.

Intel is due to report third-quarter results on Oct. 29. Analysts expect earnings of 39 cents a share, up from 23 cents a year earlier, on revenue of $16.44 billion versus $13.65 billion.

MetricFigureIntel premarket move+4% to $93.27Decline from June peak~36%JPMorgan price target$85FY2028 EPS estimate (JPMorgan)$3.60, ~15% above consensusIntel external foundry revenue (annualized, H1 2026)under $1 billionTSMC annualized revenue~$150 billionQ3 EPS estimate39 cents vs. 23 cents a year earlierQ3 revenue estimate$16.44 billion vs. $13.65 billion

Note: Revenue and earnings figures are analyst consensus estimates ahead of the Oct. 29 report.

The read-through for investors is twofold. Intel’s roughly 6.5% weighting in the VanEck Semiconductor ETF (SMH) and 9.4% in SOXX means the stock’s swings carry outsized influence on sector fund flows. And with earnings season opening this week, the market will get its first hard test of whether the AI-driven estimate revisions JPMorgan anticipates are materializing, both at Intel and across a sector that has rallied hard this year even after the recent shakeout.