Intel shares skyrocketed more than 23.6% on Friday, closing at $82.54 and finally eclipsed the company’s long-standing peak from the year 2000. This historic rally pushed Intel’s market value above $416 billion, signalling a massive vote of investor confidence in the turnaround led by CEO Lip-Bu Tan.
Read: Bandwidth Blog & Smile 90.4FM Tech Tuesday: Is the AI bubble popping?
The surge was triggered by Intel’s Q1 results, which revealed a voracious demand for CPUs, specifically the Xeon server chips used in AI data centres. While graphics chips (GPUs) have dominated the “training” phase of AI, the industry is shifting toward “inference”, the process of actually running AI models to answer user queries.
Inference is proving to be a CPU-heavy task, restoring Intel and rivals like AMD and ARM (both up 11%) to the centre of the AI conversation. Even Nvidia has acknowledged this shift, recently unveiling its own rare CPU to protect its flank.
Demand was so intense during the first quarter that Intel was forced to sell inventory it had previously written off or shelved. CFO David Zinsner noted that tight supply led the company to dig into finished goods, moving “de-spec” and legacy products that were never expected to see the light of day.
“It was either de-spec product or legacy product we had shelved and then we worked with customers. That helped a lot,” Zinsner said, though he cautioned that this inventory “bonus” likely won’t repeat in the second quarter.
See also
The market’s excitement has pushed Intel’s valuation to a record 90x forward earnings, dwarfing Nvidia’s 22x. This premium reflects a belief that Intel is finally moving past years of manufacturing missteps. Key highlights from the quarter include:
- Tesla Partnership: Intel secured Tesla as a marquee customer for its 14A process, which will power Elon Musk’s ambitious Terafab AI chip complex.
- Price Target Hikes: At least 23 brokerages raised their targets, with the median jumping from $46.50 to $75 in just one month.
While the stock’s 120% year-to-date gain is impressive, analysts remain focused on the company’s foundry (contract manufacturing) business. If Intel can successfully scale its chip-making for external clients by 2027, the “turnaround” will be considered complete, moving Intel from a legacy chipmaker to a cornerstone of the global AI supply chain.
