By Dhirendra Tripathi,
Investing.com – Wall Street reacted positively to Intel's (NASDAQ:INTC) $20-billion plan to build two new chip plants in Arizona and its revised forecast, with several analysts raising price targets on the shares.
Intel shares jumped 5% in Wednesday’s premarket trading, but were trading up 1.3% in the U.S. morning session, to a 52-week high around $64.
Announcing the plan late Tuesday, Intel CEO Pat Gelsinger declared “Intel is back. The old Intel is now the new Intel."
The move also comes after several challenging years for the chip maker, both in its traditional PC market and the mobile segment where it has been a bystander.
Intel said it aims to become a major provider of foundry capacity in the U.S. and Europe to serve customers globally. The chip giant is also partnering IBM (NYSE:IBM) to work on creating next-generation logic and packaging technologies.
The company’s new Meteor Lake processors, its first 7nm CPU and an upgrade to the Alder Lake chips launching this year, are likely to be in market in two years.
In a separate press release Tuesday, Intel said it expects to top the previously communicated first-quarter 2021 non-GAAP revenue and earnings-per-share guidance, driven by continued demand for notebooks.
The company said it is facing intense supply constraints, particularly shortage of critical third-party components such as substrates.
A number of analysts raised their targets on Intel shares. Jefferies (NYSE:JEF) raised to $59, Truist to $73, and Needham & Co. to $74. BMO Capital reiterated its outperform rating on the stock.