It was a rough summer for Intel stock, down more than 30% since late June as investors worried that the chip manufacturer would struggle to sustain its lofty valuation as the artificial-intelligence buildout slows.

But shares were finally getting a much-needed boost on Wednesday thanks to a report of a potential deal with South Korean memory-chip maker SK Hynix.

The tie-up looks like a win-win, and came just as one analyst laid out a scenario where Intel's stock could reach $200, more than doubling from its Tuesday's close price of $97.14.

The shares are already on their way, rising more than 3% to $100.38 in premarket trading Wednesday.

SK Hynix could either lease part of Intel's planned chipmaking facility in Ohio or form a venture with Intel and major cloud firms, Reuters reported, citing three people familiar with the matter.

Talks are exploratory at this stage and opposition from South Korea's government could be a major hurdle to the deal, the report added.

Intel and SK Hynix didn't immediately respond to requests for comment from Barron's.

Both stocks rallied on the news, with SK Hynix's American depositary receipts added 3.3%.

The tie-up would align with the Trump administration's push to bring more semiconductor manufacturing to the U.S. and give Intel a presence in memory chips, the hottest AI trade this year.

The company was at one point a dominant player in memory chips but exited when it offloaded its flash-memory business to none other than SK Hynix in 2020.

Meanwhile, a partnership with Intel would give SK Hynix more of a presence in the U.S. at a time when it is struggling to keep up with sky-high demand from Big Tech hyperscalers.

The potential partnership isn't the only reason for Intel to feel bullish on Wednesday. Melius Research analyst Ben Reitzes said in a note that $200 was still "on the table" for shares over the next two years, citing a sum of the parts valuation model.

Intel's chip foundry will carry on getting government support as it is "critical to U.S. national security, while also addressing one of the greatest shortages of all time," Reitzes wrote, adding that the asset could be spun out by 2030.

He added that with Intel's CPU (central processing unit) business, too, the company has "two distinct assets here that each could be worth well over $80."

The analyst rates Intel at Buy, with a $165 price target that suggests shares could surge 70% from their level at Tuesday's close.