Shares of Intel are up 86% year-to-date, and a fresh note from BNP Paribas explains why the rally has legs \u2014 even if the bank thinks the stock has gotten a little ahead of itself.\u00a0<\/p>\n
BNP upgraded Intel from Underperform to Neutral on Monday, lifting its price target from $34 to $60, while flagging that at $68.50, shares still imply about 12% downside to that target.<\/p>\n
Agentic AI Catalyst<\/p>\n
So what changed? Two words: agentic AI.<\/p>\n
The rise of AI agents is adding to an already enormous appetite for server CPU chips. Hyperscalers are scrambling to lock up supply, and Intel finds itself in a rare position of pricing power.\u00a0<\/p>\n
Chip prices are rising, fabs are running near full capacity<\/a>, and that combination is doing something Intel hasn\u2019t been able to say for a while: expanding margins.\u00a0<\/p>\n BNP forecasts EBITA to swing from a loss of $2.2 billion in FY25 to a positive $736 million in FY26, with the trajectory accelerating sharply to $4.6 billion by FY27 as utilization stays high and pricing holds.<\/p>\n Intel also just bought back Apollo Global\u2018s 49% stake in its Ireland manufacturing facility \u2014 a signal that management is bullish enough on the demand outlook to consolidate ownership of its own production capacity.<\/p>\n BNP models Intel\u2019s datacenter revenues growing 14% year-over-year in fiscal 2026, with another 8% increase in 2027.<\/p>\n The Foundry<\/p>\n The other piece of the puzzle is Intel\u2019s next-generation 14A manufacturing process \u2014 its most advanced chip-making node yet.\u00a0<\/p>\n Potential foundry customers are actively reviewing early 14A technical data, and Intel\u2019s CEO has publicly said progress is strong. <\/p>\n If the company can convert that interest into actual design wins \u2014 which BNP thinks could happen in late 2026 or early 2027 \u2014 it would mark a major validation of Intel\u2019s foundry ambitions and another potential margin expansion driver.<\/p>\n However, not everything is clean. The firm points to PC revenues facing headwinds from a memory supply crunch dragging industry volumes down roughly 11% this year, and server market share continues to slowly erode<\/a> toward AMD and ARM.<\/p>\n But for now, BNP says the AI tailwind is strong enough to paper over the cracks \u2014 and Intel’s margin story is finally moving in the right direction.<\/p>\n