Intel (INTC) stock surged as much as 9% on Thursday after the company reportedly inked a new deal with Apple Inc (AAPL). Per a report from the Wall Street Journal, the two companies have reached a preliminary agreement under which Intel would manufacture chips for the iPhone maker. US President Donald Trump went on to seemingly confirm the deal between the chipmaker and Apple.
Teaming with Intel could help Apple diversify its manufacturing footprint and rely less on Taiwan Semiconductor Manufacturing Company, or TSMC, its major overseas chip supplier, Wedbush Securities analyst Dan Ives said in a research note. “This preliminary deal to make chips for Apple comes after more than a year of negotiations, with the Trump post now confirming a deal is in place,” Ives wrote.
Apple previously used Intel’s chips in its laptops and desktops, but later abandoned Intel in favor of designing its own custom chips. The leading phone creator returning to work with Intel is a big move for the latter, which has signed several big deals in the past year. In that same period, INTC is up over 515%. Compared to other leading chipmakers like AMD and Nvidia (NVDA), Intel has served investors extremely well and is even favored by the US government.
New CEO Lip-Bu Tan has done well for Intel, helping it recover from years of losses. Cutting costs and driving the company’s foundry arm to reach deals to produce chips for third-party customers has proven a fruitful plan. The chip giant is also riding a strong tailwind from increased demand for central processing units (CPUs) driven by the global AI build-out. CPUs have become increasingly important as AI firms lean into AI agents, or digital helpers that can perform tasks on a user’s behalf.
Furthermore, that growth has led to Wall Street becoming increasingly bullish on Intel (INTC) of late. Bank of America Securities analyst Vivek Arya recently upgraded his buy rating for INTC, estimating that the best entry point in INTC is now. Bank of America Securities analyst Vivek Arya upgraded Intel’s stock price target to $135. He wrote in a note to clients that the semiconductor giant has an upside potential of nearly 26%. Accumulating INTC at this range, or accumulating the dips if it plunges below the $100 level during the semiconductor sell-off, could be beneficial for traders who want to maximize their returns.