Intel’s Potential Foundry Deal With Apple Could Add $10B Annual Sales By 2030: Analyst

• INTC stock gained 2% in Monday’s premarket session, while shares of Apple’s main contract manufacturer, TMSC, declined by a similar degree.
• Last week, reports said that Apple is in talks with Intel to hand over a part of the chip manufacturing handled by TSMC.
• Intel stock has more than tripled this year and is drawing exceptional interest.

Bank of America raised its price target on Intel’s stock to $96 from $56 and said a potential deal with Apple to produce chips would add $10 billion in annual sales by 2030.

The Wall Street Journal reported last week, citing its sources, that Apple is in talks to contract Intel foundry services for the production of certain chips, in a bid to diversify its vendor base beyond Taiwan Semiconductor Manufacturing Co.

BofA, which maintains its ‘Underperform’ rating amid a sharp rally in INTC in recent months, highlighted that the potential deal would open up an addressable market of $35 billion to $40 billion for Intel.

The government-backed chip market could snap up a 25% share, representing $10 in potential sales per year over time, BofA said, adding that the upside is likely “priced in” to the shares.

INTC stock gained 14% last week, and ticked 2% higher in Monday’s premarket trading.

Morningstar analysts echoed the view. In a new report, they said that while news was positive, revenue appears to be already baked into our existing growth forecast.

Moreover, “we remain skeptical that Intel will receive Apple’s premium, highest volume processors for production, such as A-series processors for the iPhone. Production of lower-volume processors for the Mac might be more likely, in our view.”

Morningstar said Apple’s longtime partnership with TSMC will remain secure, with TSMC in Taiwan still handling the bulk of chip production, but minority percentages will be built by TSMC in Arizona, and now with Intel.

TSM stock was down 2.2% in Monday’s premarket session.

INTC Pushes To Revive Foundry Business

If the Apple deal materializes, it would be a major boost for Intel. Over the past year, the company has undergone major restructuring under CEO Lip-Bu Tan, alongside the U.S. government taking a 10% stake in August, rising AI chip demand, and a recent partnership with Nvidia.

Intel previously supplied processors for Apple Mac computers from 2006 to 2020 before Apple shifted to in-house chips.

INTC Stock Surge

Intel shares have surged 240% year to date, supported by strong quarterly results last month. Revenue rose 7% to $13.6 billion, beating Wall Street estimates by roughly 9%, while Data Center and AI sales climbed 22% to $5.05 billion.

Intel Foundry’s operating loss narrowed to $2.4 billion, improving by $72 million sequentially, helped by better yields across Intel 4, 3 and 18A processes.

Retail View On INTC

On Stocktwits, the retail sentiment for INTC has fluctuated between ‘extremely bullish’ and ‘bullish,’ the latter being the latest reading, since Intel’s earnings report on April 23.

Traders were bullish on Intel and the potential for fresh highs, with some saying President Donald Trump’s weekend remarks urging Americans to buy U.S.-made products and services were an indirect nod to companies with domestic manufacturing operations, including the chipmaker.

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