Intel (NASDAQ: INTC) Shares jumped 5.3% by 10:20 a.m. ET Monday. You can thank the friendly analysts at HSBC for that.
This morning, HSBC analyst Frank Lee literally doubled his price target on the semiconductor giant’s stock, predicting Intel shares will reach $200 within a year and urging investors to buy it.
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Image source: Intel.
Why HSBC loves Intel shares
Intel shares fell sharply late last week, falling nearly 14% from Tuesday’s near-all-time high through Thursday’s close. But according to Lee, demand for computer processors, both for PCs and to support artificial intelligence inference services (i.e., AI that answers questions), is growing—and that’s great news for Intel.
Lee estimates Intel’s processor shipments will grow 30% this year, generating $24.1 billion in revenue, and that growth will continue into 2027, reaching $33 billion—about 20% more than anyone on Wall Street thinks. This is the main reason why he is now announcing literally the highest price target for Intel. any Wall Street analyst.
Intel’s secret weapon
In addition, Lee believes that foundry services (i.e. making semiconductors for other companies) will be a significant contributor to Intel’s earnings in the future. He calls the capabilities of Terafaba and Apple (NASDAQ:AAPL) — and potentially Alphabet(NASDAQ: GOOG)(NASDAQ: GOOGLE) And Nvidia(NASDAQ: NVDA)too – “too good to ignore now” and predicts that Intel will finally begin to take market share from Taiwan Semiconductor Plant (New York Stock Exchange: TSM) this year.
Is he right about all this? This is something of a gamble, and Intel shares are trading north of 900 times When you factor in trailing earnings, there’s probably more risk than reward in the stock at these prices.
Guys, carefully evaluate your risk tolerance before following HSBC’s advice on this matter.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Apple, Intel, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
