Intel shares skyrocket to all-time high as AI boom triggers remarkable turnaround

Demand for Intel’s central processors soars in Q1

The demand for Intel’s central processors from firms offering AI services was so strong in the first quarter that it even sold chips it had originally written off, leading to a remarkable turnaround that sent the company’s shares soaring on Friday.

The stock surged more than 20% to $83 in midday trading, surpassing its dot-com era peak in 2000 and pushing the company’s market value above $416 billion.

Rival AMD and Arm also saw gains on growing conviction that the process of inference in artificial intelligence could bring central processing units back to the forefront of the industry.

Nvidia, the graphics chip giant, has also taken note of the shift and prepared for increased competition by unveiling a new central processor last month.

At least 23 brokerages raised their price targets on Intel’s stock following the first-quarter results, with HSBC highlighting the growing demand for Intel’s Xeon server CPUs used in AI data centers.

Intel’s CFO David Zinsner attributed the strong forecast to higher prices and tight supply in the first quarter, which led the company to sell chips it had not expected to move.

Intel shares have surged more than 120% this year, trading at around 90 times its 12-month forward earnings estimates – its highest on record.

Intel secures Tesla as customer for chipmaking process

Earlier this week, Intel made a significant stride in its contract manufacturing ambitions by securing Tesla as a customer for its next-generation 14A chipmaking process linked to Elon Musk’s planned Terafab AI chip complex.

Bob O’Donnell, president, and chief analyst at TECHnalysis Research, noted that if the foundry business can start contributing meaningfully in 2027, it would signify the completion of the company’s turnaround.