TLDR
- Intel stock jumped 11% Wednesday, marking its highest price since early 2022
- The chipmaker has delivered 149% returns over the past year on AI infrastructure optimism
- Analysts believe Intel has exhausted its 2025 server CPU inventory, creating pricing power
- The U.S. government’s $8.9 billion stake has grown to $23 billion while Nvidia’s $5 billion bet is up $6 billion
- Wall Street expects Thursday’s earnings to show 29% data center growth despite 6% overall revenue decline
Intel posted an 11% gain Wednesday, pushing shares above $54 for their best close since January 2022. The move comes as investors position ahead of Thursday’s quarterly report.
Volume surged to 217.5 million shares, 62% higher than typical sessions. Over the past year, the stock has climbed 149% as Wall Street grows increasingly confident in the turnaround story.
The optimism stems largely from Intel’s data center division. Analysts forecast this unit will deliver $4.4 billion in fourth quarter sales, representing 29% growth. Hyperscalers building out AI infrastructure are driving demand for Intel’s server processors.
KeyBanc Research upgraded Intel to buy in January with a $60 target. Their analysis indicates Intel has sold its entire allocation of server CPUs for 2025. This supply-demand imbalance could support price increases throughout the year.
Strategic Investments Drive Confidence
The U.S. government emerged as Intel’s biggest shareholder after committing $8.9 billion last year. That investment has appreciated to roughly $23 billion as the stock rallied.
Washington views Intel as strategically critical. The company remains America’s only chipmaker capable of producing cutting-edge semiconductors at scale.
Nvidia invested $5 billion in September as part of a partnership deal. The graphics chip giant agreed to integrate Intel CPUs with its AI accelerators in data center systems. Nvidia’s position has gained over $6 billion in value.
New CEO Lip-Bu Tan has driven aggressive changes since March. He reduced headcount, cut operating expenses and reorganized the management structure. Intel recently showcased its 18A manufacturing node, which competes with TSMC’s most advanced technology.
Earnings Outlook and Analyst Views
Consensus estimates call for $13.4 billion in fourth quarter revenue, down 6% from last year. The data center surge will need to offset softness elsewhere in the portfolio.
RBC Capital Projects a modest earnings beat with guidance that meets expectations. The firm sees healthy server demand but notes memory price inflation could pressure PC unit sales in 2026.
Margin trends will draw close scrutiny. Improved pricing should help gross margins, though new products like Lunar Lake and Panther Lake may create headwinds as they ramp production.
Recent weeks brought multiple rating upgrades. Melius Research switched to buy from hold with a $50 target. Citigroup abandoned its sell rating, moving to neutral and raising its target from $29 to $50.
Still, the overall analyst community remains divided. Four rate Intel a buy, 28 assign hold ratings, and six recommend selling. The average price target of $40.86 sits well below current levels.
Sanford C. Bernstein increased its target to $36 from $35 while maintaining a market perform stance. After the sharp pre-earnings rally, Thursday’s results face elevated expectations.
Options activity suggests traders are bracing for outsized volatility. The run-up means investors will demand clear evidence of margin expansion and foundry progress to justify current valuations.
Intel reports results after Thursday’s market close. The company holds a $259 billion market cap with shares trading at 54 times earnings.
