Intel’s Foundry Split Is the Key to Melius’s $165 Target

Melius Research analyst Ben Reitzes reiterated a Buy rating and $165 two-year price target for Intel, arguing its foundry business could eventually stand apart from its chip-design operations. The target was about 70% above Intel’s $97.14 share price on September 16, when the analyst reaffirmed it.

Reitzes sees two distinct assets: Intel’s products business and the factories, engineers, and manufacturing technology in Intel Foundry. He estimates each could be worth more than $80 a share, supporting a roughly $200 combined value, with his $165 target set at a discount.

The separation is only an analyst’s scenario, not an Intel announcement. Reitzes said a foundry spinout could happen around 2030, creating a standalone U.S. manufacturer focused on customers beyond Intel’s own chip business.

The financial case still needs proof. Intel Foundry reported $5.8 billion in second-quarter revenue, but also an operating loss of $2.1 billion. Most of its work still supports Intel’s internal products, according to the company’s filing.

Intel’s products business has shown stronger recent momentum. Second-quarter revenue reached $16.1 billion, up 25% from a year earlier, while non-GAAP earnings were 42 cents per share. Intel forecast third-quarter revenue of $15.8 billion to $16.8 billion.

A possible SK hynix arrangement could also help make use of Intel’s planned Ohio facility. Reuters reported discussions about leasing space or forming a venture with cloud companies, but SK hynix said no plans or agreements had been finalized.

Investors will need to watch for firm outside foundry customers, progress on advanced manufacturing, and any concrete Ohio deal. Without those steps, the spinout thesis and the $165 target remain dependent on future execution, not a change Intel has committed to make.