TLDR
- Intel stock rose 2.8% in premarket Monday, adding to a 24% gain on Friday after a strong Q1 earnings report.
- Q1 EPS came in at $0.29, crushing the $0.01 analyst estimate, with revenue of $13.58B beating forecasts of $12.32B.
- AI server CPU demand was cited as a key driver, with management calling it “unprecedented.”
- UBS raised its price target to $83 but kept a Neutral rating, flagging Intel’s stretched forward P/E of 71x vs AMD’s 42x and Nvidia’s 23x.
- Tesla signaled it will use Intel’s 14A process for its Terafab AI chips, validating the company’s foundry push.
Intel (INTC) is having a moment. The stock was up 2.8% in premarket trading Monday at $84.84, building on a 24% surge Friday that came after a quarterly earnings report that left analysts scrambling to raise their price targets.
The numbers were hard to argue with. Intel reported Q1 EPS of $0.29 against a consensus estimate of just $0.01. Revenue hit $13.58 billion, well above the $12.32 billion Wall Street expected. That’s a 7.4% jump from the same quarter a year ago.
The company pointed to surging demand for CPUs used in AI servers as the engine behind the beat. Management used the word “unprecedented” to describe current CPU demand for AI workloads.
Intel also gave upbeat Q2 guidance, setting EPS at $0.20 and revenue guidance well above what analysts had penciled in.
The stock has now more than quadrupled over the past 12 months. It opened Monday at $82.37, near its one-year high of $85.22. A year ago, it was trading near $18.97.
Analyst Reactions
Multiple firms moved quickly after the print. HSBC upgraded Intel from Hold to Buy and lifted its target from $50 to $95. Raymond James moved from Hold to Moderate Buy. Barclays raised its target to $65 from $45, keeping an Equal Weight rating. The consensus rating sits at Hold with an average price target of $72.98.
Not everyone is rushing in though. UBS analyst Timothy Arcuri raised his target to $83 from $65 but held his Neutral rating. He flagged that Intel’s forward P/E of around 71x looks stretched compared to AMD at 42x and Nvidia at 23x.
“We have underestimated how much the market was willing to overlook a lack of earnings power,” Arcuri wrote.
That’s a fair point to sit with. The stock is priced for a lot of things to go right.
Foundry Progress
On the foundry side, Intel got a boost from Tesla, which signaled it plans to use Intel’s 14A process for its Terafab AI chips. That’s a high-profile customer win that adds credibility to Intel’s manufacturing recovery story.
Institutional investors have been adding exposure. Vanguard increased its position by 3.5% in Q4, now holding over 404 million shares. Capital World Investors grew its stake by 32.5% in Q3. Institutional ownership stands at 64.53% of the stock.
Short interest rose about 20.9% in mid-April to around 144 million shares, roughly 2.9% of the float. The short-interest ratio remains low at about 1.2 days.
One insider moved in the other direction. EVP April Miller Boise sold 20,000 shares in February at $49.05, reducing her position by about 15%.
Intel’s market cap now sits at approximately $411 billion. For the full fiscal year, analysts on average expect EPS of $0.08.
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