TD Cowen reiterated its Buy rating on Intel while increasing its price target. The firm believes Intel is well positioned to benefit from a near-term inflection in server CPU demand and ongoing supply constraints, as it does not rely heavily on TSMC’s capacity for its core server roadmap. While Intel has outsourced some PC components and chips to TSMC, its server CPU development is largely handled in-house.

This independence from foundry constraints allows Intel to capture additional demand in the server market. However, its success will depend on its abiliy to manufacture advanced process nodes and maintain strong customer demand. TD Cowen expects that the Coral Rapids platform, anticipated for late 2027 or beyond, is more likely than the Diamond Rapids platform (expected in late 2026) to reshape the competitive landscape in server CPUs.

The firm also noted valuation concerns. Intel is currently trading at approximately 63 times its projected 2027 earnings, nearly four times Nvidia’s price-to-earnings ratio. Despite acknowledging recent progress, TD Cowen remains cautious about the stock’s valuation.

In recent developments, Intel announced a multi-year partnership with Google to strengthen AI and cloud infrastructure. The collaboration will involve continued deployment of Intel Xeon processors within Google Cloud, focusing on AI, inference, and general-purpose workloads. Intel will also expand joint development efforts with Google on custom ASIC-based infrastructure processing units.

Additionally, Intel repurchased a 49% stake in its Ireland Fab 34 joint venture from Apollo for $14.2 billion, using a combination of cash and a $6.5 billion bridge loan. The company plans to refinance this transaction based on market conditions.

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Intel has also joined the Terafab project, collaborating with companies such as SpaceX, xAI, and Tesla on chip manufacturing initiatives. The company recently hosted Elon Musk, confirming its participation in the program.

These developments come amid broader strength in the technology sector and are contributing to positive investor sentiment toward Intel. Overall, the company is increasingly seen as a key beneficiary of rising AI-driven server demand, although valuation concerns remain a point of debate.