J.P. Morgan Raises Intel to Neutral After AI-Driven Chip Rout

what happened

Harlan Sur, an analyst at J.P. Morgan, has lifted his rating on Intel shares to neutral from Underperform and left his $85 price target unchanged, Barron's reports. The stock lost more than 14% during the week of the AI-related sell-off. On Monday premarket it climbed 4.4% to $93.73, after closing Friday at $89.85. Since June 30, when shares ended at $142.35, the decline has reached 37%.

Sur says the balance of risk and reward has become far more even now that the stock trades near his target. He points to growing agentic AI workloads that lean heavily on CPUs and to very tight supply of leading-edge silicon, which he expects to keep lifting earnings estimates into the coming reporting season and through calendar 2027.

Nvidia, Micron and AMD also rose premarket, and the SOXX semiconductor ETF was up 3.5%, on track to end a nine-session losing run.

why it matters

William Blair's Richard de Chazal argues that AI infrastructure spending now depends more on credit markets than investors had assumed, with lenders demanding a bigger premium for the risk. If borrowing costs do not fall, building outside the hyperscalers may slow, which matters for chipmaker valuations.

market impact

Chipmakers and SOXX: sentiment in the AI sector hinges on credit costs and the pace of infrastructure spending

tags

instruments