TLDR
- Intel stock surged 11% to its highest level since January 2022 ahead of Thursday’s earnings report
- Shares are up 149% over the past 12 months, driven by strong server chip demand and AI infrastructure spending
- KeyBanc analysts suggest Intel is sold out of server CPUs for 2025, potentially driving prices higher
- The U.S. government became Intel’s largest shareholder after an $8.9 billion investment, while Nvidia invested $5 billion
- Analysts expect Q4 revenue to drop 6% year-over-year to $13.4 billion, but data center sales could jump 29% to $4.4 billion
Intel shares jumped 11% on Wednesday, reaching their highest price point since early 2022. The move comes just one day before the chipmaker reports fourth quarter earnings.
The stock closed above $54, marking a 149% gain over the past 12 months. Trading volume hit 217.5 million shares, 62% above the typical session level.
Wall Street analysts have turned more positive on Intel’s prospects. KeyBanc upgraded the stock to a buy rating earlier this month with a $60 price target. The firm believes Intel has sold out its server CPU inventory for 2025.
“We expect outsized data center demand from hyperscalers this year to be a tailwind” for Intel’s data center business, KeyBanc analysts wrote. Strong AI infrastructure spending appears to be driving server chip demand.
Multiple other firms have raised their ratings or price targets. Melius Research upgraded Intel from hold to buy with a $50 target. Citigroup moved from sell to neutral and lifted its target from $29 to $50.
Government and Nvidia Backing
The U.S. government has become Intel’s largest shareholder following an $8.9 billion investment last year. The government’s stake has grown by $14 billion since the deal closed in August.
Nvidia invested $5 billion in Intel and agreed to integrate Intel CPUs with Nvidia AI chips. That stake has increased by more than $6 billion in value.
Intel remains the only American company capable of making advanced chips at scale. The government backing stems partly from this strategic position.
CEO Lip-Bu Tan took over in March and has cut costs, reduced headcount and reorganized leadership. The company recently showcased its 18A manufacturing technology, comparable to TSMC’s 2 nanometer process.
Earnings Expectations
Analysts project fourth quarter revenue of $13.4 billion, down 6% from the prior year. However, data center and AI sales are forecast to surge 29% to $4.4 billion.
RBC Capital expects a “slight” beat on results with an in-line outlook. The firm notes PC demand looks stable while server CPU demand remains solid.
Gross margins should benefit from better pricing. However, new products like Lunar Lake and Panther Lake entering the mix could create headwinds.
Wafer supply constraints are expected to peak in the first quarter. Higher memory prices could affect 2026 PC volume growth.
Sanford C. Bernstein raised its price target from $35 to $36, though it maintains a market perform rating. The recent rally has lifted expectations heading into the report.
The consensus rating among analysts remains at Reduce with an average price target of $40.86. Four analysts rate the stock a buy, 28 have hold ratings, and six recommend selling.
Options traders are pricing in large post-earnings volatility. The stock’s sharp pre-earnings run means results need to show clear margin improvement and execution progress to sustain the rally.
Institutional investors have been active. Vanguard increased its stake by 1.3% to 390.8 million shares in the third quarter. Capital World Investors raised its position by 32.5% to 86.5 million shares.
Intel will report earnings after the market closes on Thursday. The stock has a market cap of $259 billion and a beta of 1.35.
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