Intel Corporation experienced its largest single-day stock jump since 1987 on Friday, surging 23.6% to close at $82.54. The rally followed a robust earnings report and an optimistic revenue forecast, which together reignited investor interest in central processing units (CPUs) for artificial intelligence workloads. This development has broadened the AI chip conversation beyond graphics processing units (GPUs), traditionally dominated by Nvidia.
Advanced Micro Devices (AMD) also benefited from the positive sentiment, rising 13.9% to $347.81, while Nvidia posted a more modest gain of 4.3%, ending the day at $208.27, just shy of its 52-week high of $212.19. The collective advance reflects a shifting market perception that CPUs are becoming increasingly relevant in AI inference and agentic AI applications, where software operates with greater autonomy.
Intel's first-quarter revenue came in at $13.6 billion, a 7% year-over-year increase, with adjusted earnings of 29 cents per share. The company projected second-quarter revenue between $13.8 billion and $14.8 billion, exceeding the $13.07 billion consensus estimate from analysts polled by LSEG. Despite reporting a GAAP net loss of $3.7 billion due to restructuring charges, the strong guidance has altered the narrative around Intel's prospects.
CEO Lip-Bu Tan pushed back against skepticism, stating that the rebound in CPU demand is 'not just our wishful thinking.' CFO David Zinsner highlighted 'unprecedented demand for silicon,' underscoring the company's confidence in its turnaround strategy. However, analysts remain divided on Intel's outlook. According to StockAnalysis, 31 analysts currently rate the stock as a Hold, with an average price target of $61.23—well below Friday's close. Several firms raised their targets, including UBS to $83, TD Cowen to $75, Morgan Stanley to $73, and KeyBanc to $110.
The rally also swept up AMD, with DA Davidson analyst Gil Luria upgrading the stock from Neutral to Buy and hiking his price target to $375 from $220. Luria cited a 'structural increase in CPU demand' and sees 'meaningful upside' for AMD's numbers ahead of its May 5 earnings report. He noted that CPUs are 'reinserting' themselves into the AI landscape as workloads shift beyond GPUs. Despite this bullish call, AMD's shares now trade above the average analyst target of $267.97, even though the stock holds a Strong Buy consensus.
Nvidia remains the dominant force in AI chips, with a Strong Buy consensus and an average price target of $266.24, as per StockAnalysis. The company is set to report first-quarter fiscal 2027 results on May 20. In its fiscal fourth quarter, Nvidia posted revenue of $68.1 billion, a 73% jump from the prior year, with data-center sales hitting $62.3 billion. CEO Jensen Huang declared that 'the agentic AI inflection point has arrived,' and the company guided first-quarter fiscal 2027 revenue to approximately $78 billion.
Friday's surge may have been overdone for Intel and AMD, given the challenges ahead. Intel still faces execution risks in its foundry business and must navigate pricing and production bottlenecks. Michael Schulman, partner at Cerity Partners, described Intel's long-term strategy as a 'high-stakes gamble' as it aims to become a serious foundry competitor by 2030. For AMD, the upcoming May 5 earnings report will be crucial to determine if Intel's strong CPU demand is a broader trend or company-specific.
In summary, Intel's surprise earnings have injected new life into the AI chip trade, expanding the focus beyond GPUs to include CPUs. While Nvidia remains the top pick with the strongest analyst upside, Intel offers the newest catalyst, and AMD sits in the middle with a fresh bullish target but trading above average expectations. The AI chip landscape is evolving, and investors are now watching closely for the next earnings reports to validate the shift.
