Wall Street is stacking into Intel before the quarterly earnings report that the chipmaker will release following the close on Thursday. The stock of Intel surged up to 11 percent on Wednesday to its highest since January 2022, continuing a rise that lifted it 84 percent last year and gained momentum over the past 12 months to 149 percent.
Much of the optimism is pegged on robust sales of Intel’s new server chips, which analysts believe are reaping the gains of increasing investment in artificial intelligence infrastructure.
The KeyBanc analysts had raised the stock to the equivalent of a buy earlier this month, indicating that Intel must have sold out of server CPUs this year, implying that the prices may be on the upswing.
“We expect outsized data center demand from hyperscalers this year to be a significant tailwind” for Intel’s data center business, the KeyBanc analysts wrote. The target price of the stock stands at $60, closing higher than $54 on Wednesday.
Intel is also expecting an increase from recent indications that the company’s foundry business, which may seek an anchor customer, could begin to secure orders and become the No. 2 chip foundry behind Taiwan Semiconductor Manufacturing Co. and ahead of Samsung.
Intel has been boasting of its 18A manufacturing technology, which is considered the same as the 2-nanometer process technology of TSMC.
The U.S. government is now a significant investor in Intel, and is its second biggest shareholder following a recent investment of $8.9 billion, in part as it is the only American company that can make advanced chips.
Nvidia, the biggest manufacturer of AI chips and a prospective customer for Intel’s factories, is among the largest shareholders in the company, having invested $5 billion last year. Intel and Nvidia entered into a contract to collaborate in integrating Intel CPUs with Nvidia AI chip systems.
Since the deal was reached in August, the government stake has added $14 billion. NVIDIA’s stake has increased by more than $6 billion from its investment the following month.
Intel CEO Lip-Bu Tan joined the company in March and has since cut costs, jobs, and reorganized its leadership structure. According to LSEG, the analysts anticipated Intel to report a 6 percent year-over-year revenue increase for the fourth quarter to $13.4 billion.
FactSet estimates that the projected data center and AI sales will increase approximately 29 percent to $4.4 billion.
Other stocks in the chip market climbed on Wednesday, such as Intel competitor Advanced Micro Devices, which went up by an average of 8 percent, and memory maker Micron Technology, which surged by 7 percent. The market broadly soared after President Donald Trump said he would not use military force to acquire Greenland.
