Intel Corporation (INTC) saw its shares climb 6% in U.S. premarket trading on Wednesday, extending a remarkable rally that has seen the stock gain approximately 170% so far this year. The latest move was fueled by a combination of bullish signals from rival Advanced Micro Devices (AMD) and a report that Apple (AAPL) has held early discussions with Intel about producing device processors in the United States.
AMD raised its forecast for server CPU growth, now expecting the market to expand at a compound annual rate of over 35% through 2030, up sharply from its prior estimate of 18%. The company also reported a 57% surge in data-center revenue for the first quarter, reaching $5.8 billion. This optimistic outlook has renewed investor confidence that AI-driven demand is broadening beyond Nvidia's GPUs into the server processor segment, where Intel remains a dominant player.
According to Bloomberg, Apple has held preliminary talks with Intel and Samsung about manufacturing its device chips in the U.S., a move that could reduce its reliance on Taiwan Semiconductor Manufacturing Co. (TSM). While discussions are still at an early stage, any eventual deal would serve as a significant validation of Intel's foundry ambitions, testing its ability to deliver for external clients.
Intel's own first-quarter results provided a solid foundation for the rally. Revenue rose 7% year-over-year to $13.6 billion, with its Data Center and AI segment posting $5.1 billion, up 22%. The Intel Foundry business, which handles chip manufacturing for both internal and external customers, reported $5.4 billion in revenue, a 16% increase. CEO Lip-Bu Tan described the current technology transition as moving "from foundational models to inference to agentic," noting that this evolution is driving demand for Intel's CPUs, wafers, and advanced packaging.
The company also highlighted new customer wins, including Nvidia's selection of Intel's Xeon 6 chips as the host CPU in its DGX Rubin NVL8 systems, and an expanded multiyear partnership with Alphabet's (GOOGL) Google to supply Xeon processors for various cloud workloads.
Despite these positive developments, concerns about Intel's valuation and financial health persist. The company reported a GAAP net loss of $3.7 billion in the first quarter and negative adjusted free cash flow of $2.0 billion. Non-GAAP net income, however, improved to $1.5 billion. Analysts at D.A. Davidson flagged Intel's valuation as "stretched," while Jefferies maintained a neutral rating, stating they need to see more traction with larger customers. Citi, however, upgraded Intel to buy, citing the potential in its foundry business as a key driver.
Intel's stock dropped 3.9% on Monday, following a 160% surge over the course of 2026, underscoring the volatility that has characterized its recent performance. HSBC analysts believe Intel has an opportunity to reclaim server CPU market share from AMD, provided its foundry capacity translates into actual unit growth, but they caution that the upcoming quarters will be critical to watch.
The broader context is that Intel's rally has moved beyond simply recovering lost ground after years of manufacturing missteps and market share erosion. Investors are now betting on a broader AI ramp-up, where CPUs share data center space alongside GPUs. However, the challenge remains: translating AI buzz, Apple discussions, and foundry hopes into real orders, improved margins, and cash flow that can justify a stock price that has already priced in a turnaround.
