Prime Highlights:
- Intel’s stock jumped 11% on Wednesday, reaching its highest level since January 2022.
- Strong demand for Intel’s server chips and data center strategy is boosting investor confidence.
Key Facts:
- Intel shares have risen over 140% in the past year, marking a remarkable rally.
- The company’s 18A manufacturing technology, comparable to TSMC’s 2-nanometer process, strengthens its competitive position.
Background:
Intel’s stock jumped 11% on Wednesday, reaching its highest level since January 2022, after rising more than 140% over the past year. The surge comes ahead of Intel’s quarterly earnings report, scheduled after market close on Thursday, as investors grow increasingly optimistic about the company’s prospects.
Much of the optimism stems from strong demand for Intel’s latest server chips, which analysts say are benefiting from increased spending on artificial intelligence infrastructure. KeyBanc analysts recently upgraded the stock, noting that Intel may already be sold out of server CPUs for this year, suggesting potential for higher prices. “We expect significant data center demand from major cloud providers this year to provide a strong boost to Intel’s data center business,” the analysts wrote, setting a price target of $60. The stock closed above $54 on Wednesday.
Intel’s foundry business is also drawing attention, with recent signs suggesting the company could begin securing orders and position itself as the world’s second-largest chip foundry, behind Taiwan Semiconductor Manufacturing Co. and ahead of Samsung.
Investment from key backers has added to the positive sentiment. The U.S. government, which made an $8.9 billion investment last year, is now Intel’s largest shareholder, while Nvidia holds a significant stake following a $5 billion investment. Intel and Nvidia have agreed to collaborate, integrating Intel’s CPUs with Nvidia’s AI chips in Nvidia systems.
Since CEO Lip-Bu Tan took charge in March, the company has undertaken cost-cutting measures, job reductions, and leadership restructuring to improve efficiency. Analysts forecast a 6% decline in year-over-year revenue for Intel’s fourth quarter to $13.4 billion but expect data center and AI-related sales to surge nearly 29% to $4.4 billion.
Other semiconductor companies also saw gains, with Advanced Micro Devices rising about 8% and Micron Technology climbing 7% on Wednesday.
Intel’s stock gains show increasing investor confidence in its data center strategy, setting the stage for strong performance in the coming quarters.
