Intel Stock Rises as Analyst Sees Apple Supply Opportunity

This article first appeared on GuruFocus.

Intel (NASDAQ:INTC), a U.S. semiconductor manufacturer operating its own chip factories, rose approximately 1.3% in Friday's regular session as investors assessed an analyst proposal involving Apple's supply chain. Melius Research analyst Ben Reitzes suggested Apple (NASDAQ:AAPL) could use Intel to supplement processor manufacturing. Apple currently depends heavily on Taiwan Semiconductor Manufacturing (NYSE:TSM), a contract-chip producer, for processors used across its devices.

Warning! GuruFocus has detected 6 Warning Signs with INTC. Is INTC fairly valued? Test your thesis with our free DCF calculator.

Apple warned that component shortages were restricting its ability to meet demand for iPhones and Mac computers. Management expects current-quarter revenue growth of 9% to 11%, compared with Wall Street's approximately 12% expectation. Demand from AI data centers has increased competition for processors and memory, making manufacturing availability more strategically important. An additional foundry relationship could diversify Apple's production, although neither Apple nor Intel announced an agreement.

Intel closed near $92.32 after trading as high as $97.79, indicating that much of its earlier advance faded before the session ended. The possible Apple opportunity therefore remains an analyst-developed scenario rather than revenue included in Intel's guidance or backlog. Investors may nevertheless view the proposal as financially relevant because securing production from a customer of Apple's scale could improve factory utilization. Any formal sourcing announcement, manufacturing qualification or disclosure from either company would be needed before investors could estimate the potential revenue contribution.

View Comments