Key Takeaways
- Intel shares declined 3.4% during premarket hours Thursday despite receiving an upgraded price target
- Susquehanna increased its INTC target from $80 to $115 before the company’s Q2 earnings release scheduled for July 23
- Stronger Server CPU demand is anticipated to bolster second-quarter performance
- PC manufacturing during late 2026 is forecast to significantly underperform typical seasonal patterns
- Supply and demand imbalances in the server sector are anticipated to continue through 2028
Intel (INTC) experienced a 3.4% decline in premarket activity Thursday morning, despite Susquehanna’s decision to increase its price target for the semiconductor manufacturer to $115 from its previous $80 forecast, just ahead of the company’s upcoming second-quarter earnings announcement on July 23.
Christopher Rolland, the analyst behind the upgrade, indicated that his firm anticipates improved second-quarter performance, primarily fueled by robust Server CPU demand alongside modest gains in PC original design manufacturer production.
However, the outlook contained cautionary elements. Rolland warned that PC manufacturing during the latter half of 2026 is likely to fall substantially short of normal seasonal expectations, pressured by deteriorating conditions in the memory chip sector.
Intel is said to be strategizing to allocate its constrained front-end wafer capacity toward the server segment, aiming to take advantage of what Rolland described as the “Agentic CPU renaissance.”
This strategic shift suggests that Intel’s Client Computing Group (CCG) may experience challenges during what traditionally represents the peak demand season for personal computers.
Server Segment Provides a Silver Lining
Regarding the server business, Rolland noted that recent industry assessments indicated sustained momentum, with the overall market opportunity continuing to grow.
The supply-demand mismatch affecting the server industry is forecasted to extend well into 2028, potentially providing sustained revenue support for Intel’s datacenter operations.
Profit margins are projected to align closely with current projections, benefiting partially from server pricing improvements. However, Intel’s Panther Lake/18A production process along with its packaging operations are expected to pressure margins through the remainder of the year.
Foundry Business Gains Traction
Intel’s Foundry division also received attention, with Rolland noting emerging positive momentum, especially within advanced packaging capabilities.
One industry specialist emphasized encouraging opportunities for Intel’s EMIB advanced packaging platform, suggesting Google may be considering EMIB-T technology for upcoming TPU generations.
Regarding the 14A process technology, company leadership reportedly maintains optimism, with design commitments anticipated to materialize during the second half of 2026.
Intel’s market capitalization currently stands at approximately $503 billion, featuring a price-to-sales multiple of 8.75 — significantly exceeding the sector median of 2.95.
Insider transactions have trended negative, with $6.5 million in stock sales occurring over the previous three months, while no insider purchases were recorded during that timeframe.
Intel plans to announce its Q2 financial results following the market close on July 23.
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