Intel shares have surged 74% in 2026, trading around $68.50 and approaching a 26-year high. The chipmaker reports first-quarter earnings after the close on Thursday.
Why it matters
Intel’s revival challenges the narrative that the company had permanently lost the semiconductor race. If the rally holds, it signals that the AI infrastructure buildout needs more than just GPU makers — it needs the companies that manufacture server processors and run fabrication plants.
The demand story
Intel is largely sold out of server CPU capacity for 2026. Hyperscale cloud providers expanding data centres for AI workloads have driven demand for Xeon processors to levels that could allow Intel to raise average selling prices by 10–15% across its server portfolio. The data centre and AI business unit is expected to report revenue of $4.41 billion, up 6.8% year-on-year.
The foundry bet
On 7 April, Intel announced it would join Elon Musk’s Terafab project as primary foundry partner — a $25 billion semiconductor joint venture between Tesla, SpaceX, and xAI. The deal gave Intel Foundry its highest-profile external customer and validated the 18A process node, which entered high-volume manufacturing in October 2025.
The bear case
The stock trades at 128 times forward earnings, and the consensus analyst price target sits at $51 — well below the current price. Intel Foundry remains deeply unprofitable, contributing roughly $10 billion in annualised losses. Analysts expect the company to report Q1 earnings per share near break-even.
What happens next
Thursday’s earnings call will be watched for foundry order pipeline updates, Terafab production timelines, and whether server CPU demand is translating into margin expansion. A miss on any of these fronts could trigger a sharp correction given the stretched valuation.