INVESTMENT INSIGHTS - INTEL CORPORATION (INTC)

START – $107 | FINISH – $141.50

TRADING PLAN

●     Potential Entry: Entry can be initiated once the share price closes above $107.

●     Risk Management: The stop-loss level is around $94, representing a roughly 12.1% drop from the potential entry.

●     Profit Target: The next key resistance is near $141.50, which aligns with a 32.2% upward move from the potential entry level.

WHY THESE SHARES HAVE POTENTIAL FOR PROFIT

●     Data centre and AI demand is driving real earnings growth: Intel's turnaround is no longer just a story; it is showing up in the numbers. In Q1 2026, the company reported revenue of $13.6 billion, up 7% year-on-year and above Wall Street expectations, with earnings of $0.29 per share against a forecast of just $0.01. The standout was the data centre and AI division, which grew 22% year-on-year to $5.1 billion as demand for AI-capable server chips accelerated. Management then guided Q2 revenue to $13.8 - $14.8 billion, far above the $13.03 billion analysts expected.

●     Intel's factories are finally winning customers: Intel doesn't just design chips, it also builds them in its own factories, a business called Intel Foundry. For years these factories cost Intel billions with little to show for it, but that is now changing. Intel's newest chipmaking method, called 18A, is the most advanced ever built in America, and the factories are getting much better at it. Out of every 100 chips made, about 85 now come out working, up from 65 just three months ago. Only TSMC, the world leader, does this better. The first products made this way, Intel's new laptop chips, went on sale in January 2026 and are now being produced in large numbers in Arizona. Most importantly, other companies are now paying Intel to build chips for them. Cybersecurity firm Fortinet signed up as a customer, a major cloud company has committed to using Intel's factories, and Intel deepened its AI partnership with Google Cloud.

●     A low-cost AI chip is coming to challenge Nvidia: Every time you ask an AI tool like ChatGPT a question, powerful computer chips in a data centre do the work of producing the answer. This is the fastest-growing part of the AI business, and right now Nvidia sells almost all of these chips at very high prices. By the end of 2026, Intel plans to launch its own version, called Crescent Island, designed to do the same job cheaper. It uses cheaper memory than Nvidia's chips and doesn't need any special liquid cooling, so companies can plug it into the ordinary servers they already have instead of paying for expensive upgrades. Test versions are already in customers' hands. Nvidia's market is so enormous that even if Intel wins just a small piece of it, that's a whole new source of income the company doesn't have today.

TECHNICAL INDICATORS

●     Ascending channel, lower bound tested: The share price has been trending upward within an ascending channel and has just tested the lower bound of that channel. In an established uptrend, the lower trend line acts as dynamic support where buyers have repeatedly stepped in, and the current test offers a favourable entry point with a clearly defined risk level just below the channel.

●     Trading above the 200-day SMA: All of this is happening above the 200-day simple moving average (SMA), the key long-term dividing line between a bullish and bearish trend. The price holding above this level confirms the long-term momentum remains positive and buyers are in control.

●     Bollinger Band support held on the retrace: When the share was retracing, it failed to close below the lower bound of the Bollinger Band. A retracement that cannot close beneath the lower band signals that selling pressure lacked the strength to break the stock out of its normal trading range, a potential sign the pullback was orderly profit-taking rather than a change in trend.

Taken together, the test of the ascending channel's lower bound, the price holding above the 200-day SMA, and the defended lower Bollinger Band present a technically constructive setup for the stock.

RISKS

●     The factory business still has to prove itself: While the headlines sound exciting, the money from outside customers is still very little. Of the $5.4 billion Intel's factory division earned last quarter, only $174 million came from other companies — the rest was Intel building chips for itself. Rival TSMC is still slightly ahead on quality, and the big customer decisions on Intel's next factory technology are only expected between late 2026 and early 2027. If those big customers don't sign up, a key part of the reason to own this share falls away.

●     Intel is still losing money on paper and faces tough rivals: Once you include over $4 billion in one-off costs from restructuring the company, Intel actually made a loss last quarter. At the same time, its competitors are strong: Nvidia dominates AI chips, and AMD keeps taking customers in server processors. Intel's new AI chip still has to prove it can compete against these established players, and any slip-up could send the share price down quickly, because much of the good news is already priced in.

SOURCES

●     Intel (INTC) Q1 2026 earnings report

●     Intel Q1 2026 earnings beat on data center, AI demand

●     Intel (INTC) surged 8% Tuesday on three catalysts – earnings tomorrow

●     Intel (INTC) Q2 earnings Thursday; up 163% YTD, options price 15% swing

●     Intel INTC stock rises as 18A progress and Fortinet partnership boost turnaround hopes

●     Intel details Crescent Island AI GPU with up to 480GB LPDDR5X

●     Intel to expand AI accelerator portfolio with new GPU

●     Intel's 18A and 14A bets face make-or-break year

Disclaimer:
*Any opinions, views, analysis, or other information provided in this article is provided by BROKSTOCK SA trading as BROKSTOCK as general market commentary and should not be viewed as advice according to the FAIS Act of 2002. BROKSTOCK SA does not warrant the correctness, accuracy, timeliness, reliability, or completeness of any information provided by third parties. You must rely upon your judgement in all aspects of your investment decisions, and all decisions are made at your own risk. BROKSTOCK SA and any of its employees shall not be responsible for and will not accept any liability for any direct or indirect loss, including, without limitation, any loss of profit which may arise directly or indirectly from the use of the market commentary. The content contained within the article is subject to change at any time without notice. BROKSTOCK SA is an authorised financial services provider - FSP No. 51404. T&Cs and Disclaimers are applicable: https://brokstock.co.za/
** This article was prepared by BROKSTOCK analyst Maboko Seabi