Shares of Intel surged more than 25% in premarket trade on April 24, putting the stock on track to surpass its dot-com era peak, as strong earnings and rising AI demand reshaped investor sentiment.
On April 24, at 10:22 a.m. GMT-4, Intel Corp shares were trading at $81.62, up $14.85 (22.23%), after touching a high of $85.22, levels that would take the stock past its previous record closing high of $74.88 set on Aug. 31, 2000.
The rally follows a blockbuster first-quarter performance. Intel reported adjusted earnings per share of 29 cents, sharply beating Wall Street estimates of 2 cents and rising from 13 cents a year ago. Revenue came in at $13.6 billion, ahead of expectations of $12.4 billion and up 7% year-on-year.
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Barron's reported that CEO Lip-Bu Tan said on the earnings call, “In recent months, we have seen clear signs that the CPU is reasserting itself as the indispensable foundation of the AI era.”
Growth was led by a 22% jump in data centre revenue, driven by demand linked to artificial intelligence workloads, while the PC segment proved more resilient than expected despite memory price pressures.
Intel's upbeat outlook further strengthened the rally. The company guided for second-quarter revenue growth of about 11% at the midpoint, alongside improving gross margins, both ahead of analyst expectations.
Brokerages turned more constructive. Analysts at HSBC said the upside potential from Intel's CPU strength “remains undervalued by the market,” raising their price target to $100 and maintaining a Buy rating. They expect CPU shipments to grow more than 20% through 2026 and 2027, driven by “agentic AI”.
Meanwhile, Jefferies analyst Blayne Curtis lifted his target to $80 but retained a Hold rating, noting, “It remains early days for AI's impact on the CPU market with plenty of room to run.”
The rally marks a sharp turnaround for Intel, which had struggled with manufacturing setbacks and falling market share in recent years. From a low of around $17.67 last year, the stock has staged a dramatic recovery, aided by strategic shifts and fresh partnerships, including ties with Nvidia and ventures involving Elon Musk's companies.
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“A year ago, the conversation about Intel was about whether we could survive,” Tan said. “Today, it's about how quickly we can add manufacturing capacity and scale our supply to meet enormous demand.”
Despite the optimism, challenges remain. Intel's manufacturing business continues to lag behind Taiwan Semiconductor Manufacturing Company, and its foundry unit posted a $2.4 billion loss. The company also booked a $4.1 billion restructuring charge linked to its Mobileye subsidiary.
Barron's reported that at current levels, Intel is trading at around 92 times forward earnings, significantly higher than the broader S&P 500 multiple of about 21, raising questions about valuation even as momentum builds.
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