Intel’s stock jumps 11% to highest since early 2022 ahead of earnings
Intel CEO Lip-Bu Tan holds a slab of CPU tiles for the Intel Core Ultra series 3, codenamed Panther Lake, outside the Intel Ocotillo campus in Chandler, Arizona.
Courtesy: Intel
Wall Street is crowded Intel ahead of the chipmaker’s quarterly earnings report after the close on Thursday.
The stock rose nearly 11% on Wednesday, reaching its highest level since January 2022, continuing an 84% rally over the past year and bringing its gains over the past 12 months to 149%.
Much of the optimism is tied to strong sales of Intel’s latest server chips; These are benefiting from increased spending on AI infrastructure, analysts say. KeyBanc analysts upgraded the stock to the equivalent of a buy earlier this month, suggesting that Intel is likely out of server CPUs for this year, meaning prices could rise.
“We expect large data center demand from hyperscalers this year to be a significant tailwind for Intel’s data center business,” KeyBanc analysts wrote. He has a $60 price target on the stock, which closed above $54 on Wednesday.
Intel is also buoyed by recent indications that the company’s foundry business, which is still on the hunt for major customers, may begin securing orders and become the No. 2 remaining chip foundry. Taiwan Semiconductor Manufacturing Inc. and ahead of Samsung.
Intel recently introduced its 18A manufacturing technology, which is considered equivalent to TSMC’s 2 nanometer process technology. The US government has become a major backer of Intel, making it its largest shareholder following an $8.9 billion investment last year; This is partly because it is the only American company capable of producing advanced chips.
NvidiaThe leading maker of AI chips and potential customer of Intel factories is one of the company’s largest shareholders after investing $5 billion last year. Intel and Nvidia have agreed to work together to integrate Intel’s CPUs with Nvidia’s AI chips in Nvidia systems.
The government’s share has increased by $14 billion since the agreement was adopted in August. Nvidia’s shares have risen by more than $6 billion since the investment the following month.
Intel CEO Lip-Bu Tan was appointed to the role in March and has since cut costs, cut jobs and reshuffled its leadership structure.
Analysts expect Intel to see a 6% decline in annual revenue in the fourth quarter, to $13.4 billion, according to LSEG. However, according to FactSet estimates, they predict that data center and artificial intelligence sales will increase by approximately 29% to $4.4 billion.
Other chip stocks rose Wednesday, including Intel’s rival Advanced Micro DevicesGained around 8% and memory builder Micron TechnologyIt increased by 7%. The market rose overall after President Donald Trump said he would not use military force to take Greenland.
WRISTWATCH: Could Intel’s New Arizona Chip Factory Bring It Back from the Brink?
