Intel CEO Lip-Bu Tan holds a wafer of Intel Core Ultra Series 3 (codename: Panther Lake) CPU tiles outside Intel’s Ocotillo campus in Chandler, Arizona.
Provided by: Intel
Wall Street is in turmoil intel The announcement comes ahead of the semiconductor maker’s quarterly earnings report, scheduled for Thursday after trading.
Shares rose about 11% on Wednesday to their highest since January 2022, continuing an 84% rise last year and a 149% rise over the past 12 months.
Much of the optimism has to do with strong sales of Intel’s latest server chips, which analysts say is benefiting from increased spending on artificial intelligence infrastructure. Analysts at KeyBanc upgraded the stock to the equivalent of buy earlier this month, suggesting that Intel is likely to sell out of its server CPUs this year, potentially pushing prices higher.
KeyBanc analysts said, “We expect this year’s outsized data center demand from hyperscalers to be a major tailwind for Intel’s data center business.” They have a price target of $60 for the stock, which is currently trading at around $53.
Intel is also getting a boost from recent signs that its foundry business, which is still searching for major customers, is starting to secure orders and could become the next No. 2 chip foundry. Taiwan semiconductor manufacturing company And before Samsung.
Intel recently touted its 18A manufacturing technology, which appears to be on par with TSMC’s 2-nanometer process technology. The U.S. government has been a key backer of Intel, investing $8.9 billion last year to make it its largest shareholder, in part because it is the only U.S. company capable of making advanced chips.
NvidiaThe company, a major maker of AI chips and a potential customer for Intel’s factories, is one of the company’s largest shareholders, having invested $5 billion last year. Intel and Nvidia have agreed to work together to integrate Intel’s CPUs and Nvidia’s AI chips into Nvidia systems.
Since the deal was agreed in August, the government’s contribution has increased by $14 billion. Nvidia’s stock has increased by more than $6 billion since the investment the following month.
Intel CEO Lip Vu Tan was appointed to the top job in March and has since cut costs, cut jobs and restructured the company’s leadership structure.
Analysts expect Intel’s fourth-quarter revenue to fall 6% from a year ago to $13.4 billion, according to LSEG. However, FactSet estimates that data center and AI revenue is expected to rise nearly 29% to $4.4 billion.
Other semiconductor stocks rose on Wednesday, including Intel’s rivals. advanced micro deviceup about 8%, memory maker micron technologyup 7%. Markets rose broadly after President Donald Trump said he would not use military force in Greenland.
WATCH: Can Intel’s new Arizona chip manufacturing plant bounce back from the brink?
