KeyBanc maintains overweight rating on Intel with $155 target

KeyBanc expects Intel to report stronger third-quarter results and raise fourth-quarter guidance, driven by continued strength in server CPU demand, according to a preview released Monday.

The firm anticipates server CPU performance will remain strong as agentic AI demand continues to exceed expectations. KeyBanc projects Intel will support 30-35% unit growth in 2027 despite capacity constraints from insourcing Nova Lake tiles on 18A.

KeyBanc’s third-quarter revenue estimate stands at $16.9 billion with earnings per share of $0.46, compared to consensus estimates of $16.5 billion and $0.40. For the fourth quarter, the firm projects revenue of $18.1 billion and EPS of $0.54, above consensus estimates of $17.1 billion and $0.44.

The firm noted that Intel has expanded its foundry and advanced packaging pipeline with commitments from Broadcom for networking switches, Alphabet for server CPUs, Apple for M/A series chips, AMD for Xilinx FPGAs, Microsoft for server CPUs, and Nvidia for gaming GPUs. Most wins are expected on the 14A process node.

Anthropic represents a potential opportunity of 5 million to 10 million lifetime AI ASIC units, with the company evaluating Intel across front-end and advanced packaging capabilities.

KeyBanc identified EMIB-T substrate yields as a risk factor, with current blended yields of 30-40% versus a 50% target. This could constrain the Humu Fish ramp, now delayed to the second quarter of 2028.

The firm maintained its overweight rating and $155 price target on Intel, based on 10 times enterprise value-to-sales on its fiscal 2027 revenue estimate of $83.6 billion. Intel currently trades at 9.0 times consensus enterprise value-to-sales, compared to a three-year median multiple of 3.1 times.