Mizuho cuts Intel target to $92 despite AI-driven growth potential

Mizuho Securities just did the Wall Street equivalent of saying “you’re great, but not right now.” Analyst Vijay Rakesh slashed his price target on Intel from $109 to $92 while maintaining a Neutral rating, acknowledging that the chipmaker’s AI story is genuinely compelling but arguing the math doesn’t work in the near term.

The cut is notable partly because of the direction Mizuho had been traveling. Earlier in 2026, Rakesh had been raising his Intel target, setting it at $128 in June and then $135 in July. The reversal to $92 represents a roughly 32% pullback from that July peak.

The bull case Rakesh isn’t ignoring

Rakesh outlined four factors that could propel the stock over time. First, demand for server CPUs driven by agentic AI is expected to accelerate through 2027. Second, CPU supply constraints are likely to persist through 2027, which creates pricing power for manufacturers who can deliver. Third, Intel’s advanced-packaging revenue, built around its EMIB-T technology, could reach $3.5B by 2029. And fourth, PC refresh cycles are proving steadier than feared, providing a floor under Intel’s client computing segment.

Intel’s most recent quarter backs up some of this optimism. Data Center and AI segment revenue climbed 24% quarter-over-quarter in Q2 2026, fueled primarily by rising server CPU demand.

Why Rakesh cut anyway

The problem, in Rakesh’s view, is that good catalysts in 2027 and 2029 don’t fix what’s happening right now. Margin pressures in Intel’s foundry business remain a drag, and softness in PC demand continues to weigh on the top line, contributing to what Rakesh describes as valuation compression across AI-related equities more broadly.

His $92 target sits well below the Wall Street consensus of approximately $116.

Intel’s competitive position in the AI arms race

Intel positions itself as a key supplier of CPUs for AI workloads while simultaneously building out foundry services, investing in advanced manufacturing nodes including 18A and 14A, along with packaging technologies such as EMIB-T, which allows Intel to integrate multiple chiplets into a single package. The $3.5B revenue projection for 2029 would make this a meaningful contributor to Intel’s top line. On the foundry side, the margin headwinds Rakesh flagged are a direct consequence of this strategy’s early stages.

What investors should watch

The divergence between Mizuho’s $92 target and the consensus $116 creates an interesting dynamic. Mizuho’s repeated target revisions throughout 2026—up to $135 in July, then down to $92 in September—underscore how volatile the underlying assumptions are. The next few quarters of earnings and forward guidance will likely determine whether the consensus gravitates toward Mizuho’s more conservative view or holds closer to $116.

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