Mizuho analysts see AI tailwinds for Intel despite cutting price target to $92

Intel could benefit from several tailwinds as demand for artificial intelligence infrastructure accelerates, according to analysts at Mizuho Securities.

The firm reported quarterly earnings on July 23, with second-quarter revenue growing 25% to $16 billion. Intel CEO Lip-Bu Tan said "unprecedented" AI-driven demand for computing power is strengthening its growth prospects across its CPU franchise, ASICs, advanced packaging and wafer foundry network.

The analysts maintained a "neutral" rating on INTC shares and lowered their price target from $109 to $92. They cited near-term pressure from multiple compressions across AI-related stocks, as well as weaker PC demand and margin headwinds as Intel ramps more advanced manufacturing nodes.

Intel's near-term outlook

Intel's server manufacturers are seeing strong demand for agentic AI and inference workloads, which could increase the number of CPUs used alongside GPUs. Mizuho estimates the CPU-to-GPU ratio could improve from roughly 1:4 in 2025 to 1:1 over the long term as inference workloads grow.

The company could also benefit from continued CPU supply constraints, with analysts expecting demand to outstrip supply through 2027.

Analysts estimate advanced packaging revenue could reach $2 billion in 2028 and $3.5 billion in 2029, while external foundry revenue could reach $2.5 billion and $3.5 billion, respectively, as Intel’s 14A process gains traction.

"We believe new CEO Lip-Bu Tan is driving new opportunities with a vision to return the company to growth trajectory to catch up with key peers AMD/NVDA in AI, Server, and PC," Mizuho analysts wrote Friday in a client note. "INTC's market opportunities remain abundant with server CPU strong, market share in PC, but a lagging AI portfolio with Gaudi."

Mizuho said that while the PC market is showing signs of resilience, they expect shipments to decline about 13% this year. Corporate PC refreshes are beginning to materialize, but tight memory supplies and Intel's decision to allocate more manufacturing capacity to servers could weigh on the market into 2027.