Intel shares surge ahead of earnings: “It’s the most optimistic people have felt in a long time”
Shares climb ahead of results, taking Intel above a $250 billion market cap and extending its 2026 gains to around 35%.
Intel shares surged over 10% on Wednesday, lifting the company’s market capitalization above $250 billion for the first time since 2022, as investors positioned themselves ahead of a closely watched earnings report that many see as a test of whether the chipmaker’s long-promised turnaround is beginning to materialize.
The rally extends a sharp recovery in Intel’s stock, which is now up about 35% in 2026, following an 84% gain last year that far outpaced the broader semiconductor sector. After years of strategic missteps and lost ground to rivals, the sudden optimism marks a striking reversal for a company that only recently appeared mired in decline.
Much of the renewed confidence centers on CEO Lip-Bu Tan, who last year laid out an aggressive plan to stabilize Intel’s finances, streamline its operations and reassert its relevance in data center computing.
“It’s the most optimistic, I think, people have felt about the company in a long time; the near-term dynamic’s set up very well,” Ryuta Makino, an analyst at Intel investor Gabelli Funds, told Reuters.
The turnaround narrative has been reinforced by a series of high-profile investments engineered under Tan’s leadership. A $5 billion investment from Nvidia, alongside $2 billion from SoftBank and a stake held by the U.S. government, has strengthened Intel’s balance sheet and given management room to reshape both its manufacturing strategy and its approach to artificial intelligence, areas where the company had fallen badly behind.
Intel’s shares collapsed in 2024 after years of execution problems, including a failed AI roadmap that left it trailing competitors and culminated in thousands of job cuts. Tan has since moved to overhaul Intel’s chipmaking operations and pare back what he described as an overgrown management structure, signaling a break with the company’s recent past.
Investor expectations are particularly high for Intel’s data center business. According to estimates compiled by LSEG, revenue from the division is expected to jump more than 30% to $4.43 billion in the December quarter, buoyed by rapid build-outs of advanced data centres by large technology companies. Those facilities still rely heavily on Intel’s traditional server CPUs, even as graphics processors from Nvidia dominate AI workloads.
That dynamic has fed hopes of stronger pricing power. “That’s really the big Intel bull case here, I think there will be at least a double-digit server CPU price hike in 2026,” Makino said.
At least 10 brokerages have raised their price targets or ratings on Intel over the past two months, reflecting growing confidence that the company’s core server franchise may be more resilient than many had feared.
The picture is more mixed in personal computers, where Intel has steadily lost market share to AMD and Arm-based designs. Sales in the PC unit are expected to have risen 2.5% to $8.21 billion, but analysts warn that higher memory prices, driven by a global shortage, could weigh on demand by making laptops more expensive.
While some see Intel’s refreshed product lineup as a potential stabilizer, risks remain. The company has begun shipping its new “Panther Lake” PC chips, the first built using its closely watched 18A manufacturing process. Previous generations were largely produced by Taiwan Semiconductor Manufacturing Company, underscoring how much is riding on Intel’s ability to fix its own factories.
Intel has said yields from 18A are improving month by month, but Reuters has reported that only a small proportion of chips produced so far meet customer standards. Nvidia and Broadcom have run manufacturing tests with Intel, raising hopes of future foundry customers, though commercial volumes remain uncertain.
Margin pressure has not disappeared. Intel’s adjusted gross margin is expected to have fallen about six percentage points to 36.5% in the December quarter, reflecting the high costs of fixing its manufacturing operations.
Even so, the surge in Intel’s shares suggests that investors are increasingly willing to look past near-term weaknesses and focus on the possibility of a longer-term recovery. With expectations now elevated and the stock back above a $250 billion valuation, the forthcoming earnings report may determine whether the rally is built on solid ground, or simply on hope.
Reuters contributed to this report.
