Intel experienced a historic surge in its stock price on Friday, with shares jumping 24% to a record $83 after a first-quarter performance that significantly outpaced expectations. This rally, which pushed the company’s market value past $416 billion, was driven by an unexpected explosion in demand for central processors (CPUs) from AI service providers. The hunger for chips was so intense that Intel was able to sell off “written-off” and legacy inventory that had previously been shelved, a development CFO David Zinsner described as a unique boost to the quarter’s results.
The market’s reaction reflects a growing belief that the “inference” phase of AI—where models answer user queries—could bring CPUs back to the center of the industry. This shift has also benefitted rivals like AMD and Arm, while even the dominant graphics chip leader, Nvidia, has begun encroaching on CPU territory to defend its position. Analysts have responded with a wave of price target hikes, with Intel’s median target rising from $46.50 to $75 in just one month.
Beyond its chip sales, Intel’s broader recovery under CEO Lip-Bu Tan is gaining momentum. The company recently secured a high-profile win for its contract manufacturing division, landing Tesla as a customer for its advanced 14A chipmaking process. Industry analysts suggest that if Intel’s foundry business begins to contribute significantly by 2027, it would signal the successful completion of one of the most significant turnarounds in the tech sector’s history. Currently, the stock is trading at an all-time high valuation of 90 times its forward earnings, a testament to renewed investor confidence.
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