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A very expensive vote of confidence
Intel just got a little bit of its swagger back. Northland Securities upgraded the chipmaker to Outperform and tossed out a $120 price target, citing progress in the turnaround, tight server CPU supply, and the possibility that Elon Musk’s Terafab project could become a giant demand engine for Intel Foundry.
The stock clearly liked the message, jumping more than 10% as investors re-priced the whole “maybe this comeback is real” narrative.
Why Terafab matters more than the usual analyst cheerleading
This isn’t just another Wall Street mic-drop with a fancier font. Intel Foundry reportedly pulled in $5.8 billion in second-quarter revenue, but it also posted a $2.1 billion operating loss. Ouch. And only $293 million of that revenue came from external customers — which is basically the corporate version of a party where nobody shows up.
That’s why scale matters. If Musk’s Terafab project ends up leaning on Intel’s next-gen 14A process, Intel could land a marquee outside customer and fill more of its factories. Northland thinks the project could eventually hit 22.4 million advanced-logic wafers a year, which would be the kind of volume that makes investors lean forward in their chairs.
The real investing question
Intel doesn’t need one nice headline. It needs a parade of them. The company is also pointing to more than one million wafers processed with ASML’s High NA EUV tech, and analysts say a huge customer like Terafab could help Intel win more business down the line.
- More scale could mean better foundry economics.
- Better foundry economics could make 14A look less like a moonshot.
- And if server CPU shortages keep giving Intel pricing power, the turnaround story gets another leg to stand on.
Big picture: Intel’s still in fixer-upper mode, but Terafab is the kind of potential anchor tenant that can make a foundry look less lonely and a lot more investable.