Dan Ives Compares Intel's Comeback To Rocky Balboa, Says AI Trade Is In Its Third Innings — 'You Follow The Capex, That's Where Investors Are'

• Ives added that technology companies are now experiencing the second- and third-order effects of the expansion of the AI tech trade, from just AI chips to other aspects of the stack.
• He added that for every dollar spent on Nvidia chips, there is an eight- to 10-fold multiplier across the rest of the stack.
• Analysts at Evercore ISI upgraded Intel to ‘Outperform’ from ‘In Line’, while more than doubling their price target for the INTC stock to $111 from $45.

Dan Ives, Global Head of Tech Research at Wedbush, on Friday compared chipmaking giant Intel Corp.’s (INTC) resurgence to the comeback of Rocky Balboa.

During an interview with CNBC, Ives noted that the current earnings season is critical and at the heart of investors flocking back to technology stocks amid the ongoing geopolitical concerns.

“It’s showing we’re in the third inning of this non-ending game relative to AI and that’s bullish. That’s why dip buyers will continue to be there for broader tech despite geopolitical jitters. You follow the capex, that’s where investors are,” Ives added.

Intel shares were up nearly 30% in Friday’s pre-market trade, on track to open at a new all-time high.

The company’s first quarter (Q1) results blew past Wall Street expectations, with Intel reporting earnings per share (EPS) of $0.29 on revenue of $13.6 billion, compared to estimates of an EPS of $0.01 on revenue of $12.36 billion, according to Fiscal.ai data.

AI Tech Trade Spreading, Says Ives

Ives added that technology companies are now experiencing the second- and third-order effects of the expansion of the AI tech trade, from just AI chips to other aspects of the stack.

“Intel, Cisco, Dell… it’s [AI trade] is spreading. What’s essentially happening is that this tech trade is now.. second, third derivatives playing out across hardware, semis, what I ultimately believe will be software and infrastructure,” Ives added, explaining the resurgence of Intel.

He added that for every dollar spent on Nvidia chips, there is an eight- to 10-fold multiplier across the rest of the stack.

Wall Street Turns Bullish

According to TheFly, analysts at Evercore ISI upgraded Intel to ‘Outperform’ from ‘In Line’, while more than doubling their price target for the INTC stock to $111 from $45.

The firm stated that it sees Intel as a “CPU renaissance play,” while adding the company’s new CEO, Lip-Bu Tan has put the chipmaker back on the competitive track.

Jefferies analysts hiked their price target for Intel to $80 from $60, while keeping a ‘Hold’ rating on the stock. The firm stated that these are still early days for the impact of AI on the CPU market, adding that there is plenty of room to run.

Analysts at BofA hiked their price target for INTC stock to $56 from $48 while keeping an ‘Underweight’ rating. The firm remained cautious about Intel’s gross margins, calling them subpar while highlighting that the company continues to burn through cash due to its investments in additional capacity.

How Did Retail Traders React?

Retail sentiment on Stocktwits around Intel trended in the ‘extremely bullish’ territory, with message volumes at ‘extremely high’ levels at the time of writing.

One bullish user stated that if investors don’t buy Intel at current levels, they will be buying above $100 later.

INTC stock is up 81% year-to-date and 224% over the past 12 months. The S&P 500 ETF (SPY) is up 32% over the past 12 months, while the Invesco QQQ Trust ETF (QQQ) is up 43%.

The Vanguard S&P 500 ETF (VOO) and the iShares Core S&P 500 ETF (IVV) are up 32% during this period.

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