Key Takeaways
- Shares of Intel dropped 3.4% during premarket hours Thursday even with an upgraded price target
- Susquehanna increased its price objective on INTC from $80 to $115 before the company’s Q2 earnings release scheduled for July 23
- The analyst anticipates improved Q2 performance fueled by robust Server CPU demand
- PC production during the latter half of 2026 is forecast to fall significantly short of typical seasonal patterns
- Supply and demand imbalances in the server sector are anticipated to continue through much of 2028
Shares of Intel (INTC) declined 3.4% during premarket hours Thursday, despite Susquehanna’s decision to increase its price objective on the semiconductor giant to $115 from its previous $80 target, with the company’s second-quarter earnings announcement scheduled for July 23.
Analyst Christopher Rolland indicated the investment firm anticipates improved second-quarter performance, primarily attributed to heightened Server CPU demand alongside modest gains in PC original design manufacturer (ODM) production.
However, the outlook wasn’t completely positive. Rolland noted that PC production volumes in the second half of 2026 are anticipated to fall considerably below typical seasonal expectations, hampered by deteriorating conditions in the memory chip market.
Intel is purportedly preparing to allocate its constrained front-end wafer production capacity toward the server segment, seeking to leverage what Rolland described as the “Agentic CPU renaissance.”
This strategic shift suggests the company’s Client Computing Group (CCG) may encounter challenges during what traditionally represents the peak seasonal window for personal computer demand.
Server Segment Provides Positive Outlook
Regarding the server business, Rolland noted that recent industry checks indicated sustained momentum, with the addressable market continuing to grow.
The mismatch between supply and demand within the server market is projected to extend well into 2028, potentially providing sustained revenue support for Intel’s data center operations.
Profit margins are anticipated to align closely with current projections, supported partially by server pricing improvements. However, Intel’s Panther Lake/18A manufacturing technology and its packaging operations are expected to negatively impact margins through the end of the year.
Foundry Business Gains Traction
Intel’s Foundry division also received attention, with Rolland noting some initial positive momentum, especially within advanced packaging capabilities.
One industry specialist emphasized encouraging opportunities for Intel’s EMIB advanced packaging platform, with Google reportedly considering EMIB-T technology for upcoming TPU generations.
Concerning the 14A process technology, company leadership reportedly maintains an optimistic stance, with design commitments anticipated to surface during the latter half of 2026.
Intel’s current market capitalization stands at approximately $503 billion, featuring a price-to-sales multiple of 8.75 — significantly higher than the sector median of 2.95.
Insider transaction activity has trended bearish, with $6.5 million in stock sales recorded over the previous three months and zero insider purchases documented during that timeframe.
Intel is scheduled to announce Q2 financial results following the market close on July 23.
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