Northland Securities’ decision to upgrade Intel (INTC) to “Outperform” and set a $120 price target has added fresh momentum to the chipmaker’s comeback narrative. On Sept. 8, analyst Gus Richard lifted his rating from “Market Perform,” citing material progress in Intel’s business and the support from tight server-CPU supply.
The call came following renewed reports that Intel could raise processor prices by up to 10% in October. Together, those developments helped drive Intel shares nearly 15% higher over the past five trading days.
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The rally stands out because it follows improving operating results, rather than a single speculative catalyst. Intel’s latest quarterly revenue rose more than 24% year-over-year (YoY), while Data Center and AI revenue climbed 59%.
Those results help explain Northland’s more constructive view and now bring the broader question into focus. Is Wall Street finally beginning to give Intel’s multiyear turnaround the credit it has been seeking? Let’s dive in.
Intel’s Results Support a Higher Bar
Intel, based in Santa Clara, California, designs and manufactures CPUs, data center processors, AI hardware, and semiconductor manufacturing technologies. Its product and Intel Foundry operations give the company exposure to both chip sales and manufacturing.
Intel shares finished Sept. 9 at $106.24, bringing their year-to-date (YTD) gain to 187.91% and their 12-month advance to 334.70%.
www.barchart.com Intel has a $526.95 billion market capitalization and trades at 9.14x sales and 95.21x forward earnings, above sector medians of 3.66x and 22.86x, respectively.
Its second-quarter 2026 results, released on July 30, reported revenue of $16.13 billion. This was 25.4% higher than a year earlier and $1.70 billion above the $14.43 billion analyst estimate. It was Intel’s seventh consecutive quarter above company guidance.
The quarter marked Intel’s strongest revenue growth in more than 15 years, according to CEO Lip-Bu Tan. AI-related businesses grew more than 70% year-over-year (YoY) and represented about 70% of total revenue.
INTC’s Data Center and AI segment generated $6.3 billion in revenue, up 59% from the prior-year quarter. Their Foundry generated $5.8 billion in revenue, up 31% YoY. However, external foundry revenue was only $293 million, meaning internal Intel production accounted for most of the segment’s revenue.
Their adjusted EPS reached $0.42, above the $0.22 analyst estimate. Operating margin was 11.1%, compared with negative 24.7% in the previous year’s quarter, as stronger sales improved cost absorption.
This recovery also strengthened Intel’s cash generation. Operating cash flow reached $8.10 billion in the June 2026 quarter, increasing 639.23% YoY.
Why Intel’s Turnaround Case Is Strengthening
The server CPU shortage gives Intel a timely opening. Intel has reportedly sold out of server CPUs through year-end as agentic AI increases CPU workloads across data center operations.
That demand is arriving as Intel expands its server lineup. The company is positioned to address that demand with Xeon 6+, its first server-class chip built on the 18A process.
Improving 18A production yields will expand Intel’s ability to supply advanced processors while also supporting its manufacturing credibility. Alphabet's (GOOG) (GOOGL) Google reportedly plans to use Intel to manufacture more than 3M Tensor Processing Units, which would provide a major external customer for the business.
Intel has also agreed to repurchase Apollo Global Management’s (APO) 49% stake in the Fab 34 joint venture in Ireland for $14.2 billion. Full ownership restores Intel’s control over a key European manufacturing site, which supports Intel 3 and Intel 4 production and could later be upgraded for 18A.
Intel has raised $20 billion to fund the capacity required for these opportunities. It sold 210.526 million shares at $95 each, increasing the offering from $15 billion, with proceeds designated for capital investments and working capital. The company is directing its financial capacity toward a foundry transition that still depends on winning external revenue at scale.
The Terafab project offers a second potential source of scale. Intel has joined the effort with Tesla (TSLA), SpaceX (SPCX), and xAI to help “refactor silicon fab technology” using its design, fabrication, and packaging capabilities. The project targets 1 TW of annual compute output if it reaches planned execution.
Together, tighter server supply and potential foundry customers give Intel clearer paths to growth. Delivering on 18A, external contracts, and Terafab will determine whether that opportunity becomes lasting earnings.
Wall Street Sees a Stronger Earnings Path
Intel’s next test comes on Oct. 22, when it reports third-quarter 2026 results. The consensus forecast calls for EPS of $0.28, up from $0.11 a year earlier and implying 154.55% YoY growth.
Investor activity has also added to the attention around INTC stock. A recent financial disclosure showed that Representative Nancy Pelosi’s household bought 10,000 Intel shares on July 24, in a transaction valued between $500,000 and $1,000,000.
The filing also disclosed the purchase of 50 Intel call options with a $50 strike price. Those contracts expire on June 17, 2027, giving the position a longer time horizon than a near-term earnings trade.
The bullish end of Wall Street has already assigned a much higher value to that scenario. Bank of America Securities reaffirmed its “Buy” rating on Intel on Aug. 12 and retained a $145 price target, implying 36.5% upside.
More broadly, the consensus from 46 analysts is a “Moderate Buy.” Their average target price of $114 implies 7% upside from Intel’s Sept. 9 closing price.
Conclusion
Northland’s $120 target suggests Intel is no longer being valued only as a turnaround promise. The company now has server CPU shortages working in its favor, stronger data center demand, improving 18A execution, and potential foundry scale through Terafab. That does not make the recovery complete. Intel still must turn foundry interest into outside revenue and lasting cash flow. The likely direction remains higher, but future gains will depend on execution catching up with expectations.
www.barchart.com On the date of publication, Ebube Jones did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.