TD Cowen Maintains Intel's Hold Rating And Is Keeping An Eye On Progress In Its Foundry Business!

TD Cowen provides a scenario analysis framework based on the sum of segments for Intel stock valuation. While progress in the foundry business is important, the product segment remains the core driver of company value.

The U.S. stock market is entering an era shaped by the rise of artificial intelligence agents. Agents have evolved from brief model calls to continuously running computing environments, potentially increasing AI infrastructure demand for general-purpose CPUs, memory, and storage, enabling CPUs to gain some incremental workloads that were previously less apparent in simple chat-based AI. Currently, the overall direction is positive, but investors believe investors need to see a clear prospect of product business revenue exceeding $100 billion and wafer foundry revenue exceeding $20 billion. Intel's total revenue over the past twelve months was $57 billion. 

Previously, incremental investment in AI infrastructure was heavily concentrated on GPUs; If a large number of agents run long-term in the future, each agent will need to continuously occupy CPU, RAM, and storage resources, then the CPU demand in AI servers may expand from assisting GPU inference to directly handling the agent execution environment.

Intel's biggest change now is that CPUs in the AI era may shift from being marginalized by GPUs to becoming one of the beneficiaries of AI infrastructure expansion; Agent AI further reinforces this logic. Meanwhile, 18A chips provide Intel with additional upside space for wafer foundry. 

Several important developments at Intel have emerged one after another. Intel CEO Liwu Chen participated as an advisor in the $85 million funding round for Indian electric motorcycle manufacturer Ultraviolette, with funds to be used to expand capacity and enrich the product line. Additionally, Tigress Financial Partners raised Intel's target price from $118 to $145, maintained a Buy rating, and identified the Terafab Partnership series as a key factor in Intel's AI-driven transformation strategy, noting that Intel's second-quarter results confirm its accelerated recovery driven by AI.

Market Insight:

Citigroup has raised its outlook for the semiconductor sector, acknowledging the strong rebound of semiconductor stocks including Intel. These developments reflect Intel's current active period of strategic transformation, with ongoing strategic partnerships and generally positive analyst evaluations.