HSBC has doubled its price target on Intel to $200 - the highest on Wall Street - while maintaining a Buy recommendation, based on an improved outlook for server CPUs and the bank's first-time inclusion of Intel's foundry business in its valuation.
Analyst Frank Lee told clients that server CPU expansion "remains the key driver for Intel's earnings growth in 2026/27," and he revised his shipment growth assumptions higher. Lee increased his 2026 server CPU shipment growth estimate from 20% to 25% year-on-year, and for 2027 he lifted the projection from 20% to 30%.
On the revenue side, HSBC now models $24.1 billion in 2026 data center and AI revenue for Intel, a figure Lee notes is 4% above consensus. For 2027, HSBC's DCAI revenue estimate is $33.0 billion, which the bank says stands about 20% higher than consensus expectations.
HSBC also said Intel's foundry business can no longer be ignored in investor valuations. The bank points to the company's emergence as an alternative to TSMC in the face of front-end fabrication and advanced packaging constraints. In support of that view, Lee highlighted recent customer developments and engagements.
Specifically, HSBC noted that Intel has signed Terafab and Apple as foundry customers and is in active engagement with Google and Nvidia. The bank called out Intel's EMIB advanced packaging solution for its scalability, saying EMIB can scale to 12 times reticle size compared with CoWoS-S's 3.3 times. HSBC's sensitivity work indicates that wider EMIB adoption could boost Intel's 2028 EPS by 23% versus the bank's base case.
HSBC retains a bullish earnings stance, with the firm's 2026 and 2027 EPS estimates remaining 21% and 55% above consensus, respectively. Those assumptions underpin roughly 58% upside to the new $200 price target, according to the bank.
Looking ahead, HSBC expects design commitments from foundry customers to materialize through the second half of 2026 and into 2027, a timing the bank says will be important for the realization of the foundry opportunity.
Implications
HSBC's revision combines stronger server CPU shipment assumptions with an explicit valuation of Intel's foundry prospects. The bank's analysis links packaging advantages and customer signings to a path for higher revenues and potentially significant upside to EPS under broader EMIB adoption.