Intel Shares Rise 29% on Earnings Beat as AI CPU Demand Soars

Intel shares are on track for their biggest single-day jump in years. The stock climbed about 29% in premarket trading on Friday. The company’s first-quarter results topped Wall Street’s forecasts for revenue, earnings, and outlook. Analysts believe this strong showing highlights how artificial intelligence is changing the server CPU market.

Adjusted earnings per share came in at 29 cents, far above the expected 2 cents. This is also up from 13 cents a year ago. Revenue reached $13.6 billion, beating the $12.4 billion forecast. Revenue grew 7% year over year. For the second quarter, Intel expects sales to grow by about 11%. The company also predicts a stronger gross profit margin.

Intel’s two main business segments outperformed expectations. Data center revenue rose 22% from last year. Strong demand for server CPUs in AI infrastructure projects drove this increase. PC sales also did better than many predicted. This came despite a memory shortage expected to have a greater impact.

HSBC raised its price target for Intel and maintained a Buy rating. The firm says the market still underestimates Intel’s CPU strength. HSBC expects CPU shipments to grow by more than 20% in both 2026 and 2027. Growth will be driven by increased use of agentic AI workloads. Jefferies also raised its price target but kept a Hold rating. The firm notes that the AI-driven CPU demand cycle is just starting and could continue for a while. Intel is expected to benefit from a supply-and-demand gap that may persist.

At today’s premarket prices, Intel shares would surpass their last record closing high from August 2000—a big turnaround from a low of $17.67 a year ago. Chief Executive Lip-Bu Tan highlighted this shift, noting that while a year ago survival was in question, the main issue now is how quickly manufacturing can keep up with demand.

Tan’s deal-making has played a key role in changing Intel’s story. He sold a 9% stake to the U.S. government. NVIDIA invested 4.5% as part of a new manufacturing partnership. Intel also bought back part of a factory it had sold to Apollo Global Management. The company announced a major new manufacturing complex in Texas to serve Elon Musk’s companies. Tesla’s CEO confirmed that the new TeraFab facility for Tesla and SpaceX will use Intel’s upcoming 14A process node (a process node refers to the manufacturing process technology used to create semiconductors; smaller numbers typically mean more advanced technology). This is Intel’s biggest external foundry commitment so far. The 14A node is expected to launch in 2028.

Intel’s foundry business is still operating at a loss. It reported a $2.4 billion operating loss for the quarter, serving just one internal customer. The company also took a $4.1 billion restructuring charge. This was related to a goodwill impairment at its Mobileye automotive chip unit. Intel’s share of data center revenue has dropped sharply compared to Nvidia’s. It fell from 71% in 2021 to about 7% last year. This highlights how much ground Intel needs to recover in the AI infrastructure market.

Intel’s stock is trading at about 92 times its projected future earnings. This is a record high for the company and well above the market average. It reflects strong investor confidence. Many believe these results mark the start of a long-term recovery, not just a short-term peak.