TLDR
- Intel stock is up over 33% in the past month and roughly 236% year-to-date in 2026, its best calendar year in more than four decades.
- AI demand is boosting Intel’s CPU business, with data center and AI-related revenue up 59% year over year to $6.3 billion.
- CEO Lip-Bu Tan says Intel can only fill about half of customer orders, showing supply is tight.
- Hedge fund ownership rose to 138 funds last quarter, while short interest also increased to about 158.81 million shares.
- History shows four of Intel’s five best years since 1981 were followed by a down year, raising questions about 2027.
Intel (INTC) stock is trading near $123, up more than 33% over the past month. The rally is being driven by fresh demand for the company’s CPUs as AI infrastructure spending grows.
For 2026 overall, Intel shares are up about 236% from where they closed in 2025. That puts the company on track for its best calendar year since at least 1981.
The move comes as investors rethink the role of CPUs in AI computing. GPUs get most of the attention, but CPUs are needed too for orchestration and general-purpose tasks.
Intel’s Xeon server processors are benefiting from this shift. Customers are pairing more CPUs with each accelerator as AI data centers scale up.
Demand Is Outpacing Supply
In its second-quarter results, Intel reported data center and AI-related revenue of $6.3 billion. That marked 59% growth year over year.
CEO Lip-Bu Tan said the company can currently meet only about half of customer requests for its processors. That points to a supply crunch rather than a demand problem.
Supply constraints like this can cut both ways. Intel learned this the hard way in 1984, when a similar shortage led customers to over-order, only for demand to collapse once supply caught up.
Intel is also chasing growth outside its core CPU business. The company is expanding its foundry operations to manufacture chips for other companies.
Google has picked Intel to build its Tensor Processing Units. SK Hynix has also been in talks with Intel about memory-chip production at its Ohio site.
If foundry work scales up, it could become another growth lane for Intel. So far, though, no major outside customer has signed on for its next-generation 14A process.
Competition and Costs Remain Risks
AMD continues to take server CPU market share from Intel. That limits how much of the industry’s growth Intel can actually capture.
Rising costs for memory, wafers, and substrates are another pressure point. If Intel passes these costs on through higher prices, some customers may delay orders or look elsewhere.
Institutional interest in Intel has grown alongside the stock’s rise. Insider Monkey’s database shows 138 hedge funds held Intel positions at the end of the second quarter, up from 112 the prior quarter.
SoftBank Group held a stake worth about $12.14 billion. Coatue Management started a new position valued near $1.68 billion.
Short interest has climbed too, reaching about 158.81 million shares as of September 15. That’s up from 135.1 million a month earlier, though it’s still just 3.01% of total shares outstanding.
Intel’s valuation has also expanded quickly. The stock now trades near 60 times its projected 2027 adjusted earnings, well above the roughly 38 times earnings it carried heading into 2004, a year when earnings rose 36% but the stock still fell 27%.
For the third quarter, Intel’s own guidance calls for revenue between $15.8 billion and $16.8 billion. That would mark growth of roughly 19% year over year at the midpoint, with adjusted earnings per share guided at $0.38 versus $0.23 a year earlier.
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