Intel Corporation (NASDAQ: INTC) saw its stock climb nearly 10% over the past week, closing Friday at $119.84 after a 1.13% gain on the day. The rally comes ahead of a long U.S. market break for Memorial Day, with Nasdaq closed Monday and resuming regular trading Tuesday at 9:30 a.m. Eastern.
Strong Revenue Forecasts and CPU Demand Drive Rally
The surge was fueled by upbeat revenue projections and robust demand for Xeon server central processing units (CPUs), which are increasingly critical as artificial intelligence systems shift from training large models to real-world deployment. Intel reported first-quarter revenue of $13.6 billion, up 7% year over year, and guided second-quarter revenue between $13.8 billion and $14.8 billion. Non-GAAP profit exceeded the company's own forecast.
CEO Lip-Bu Tan emphasized that "demand continues to run ahead of supply," particularly for Xeon server CPUs, which he said are "reasserting themselves" in the AI stack. CFO Dave Zinsner noted that AI-driven revenue lines accounted for 60% of Intel's total revenue, up from 40% a year earlier.
Wall Street Analysts Raise Price Targets
Several analysts have raised their price targets on Intel. Citi's Atif Malik increased his target to $130 from $95, while Benchmark's Cody Acree lifted his to $140 from $105. Seaport's Jay Goldberg told Barron's that Intel has "more upside to grow into its valuation" following the rally. However, caution persists. Goldberg earlier told Reuters that "no company in history has ever fallen off the Moore's law curve and made it back on," referencing the chip industry's long-standing principle that chips double in performance while halving in cost every two years.
Foundry Losses and Turnaround Risks
Intel's foundry business, which builds chips for other designers, remains a key part of its turnaround story but is a major financial drag. The company reported external foundry revenue of just $174 million for the first quarter of 2026, while the Intel Foundry segment posted a $2.44 billion operating loss. The latest 10-Q filing warns that if Intel cannot secure sufficient demand for its Intel 14A node, it may pause or abandon that node and future high-end manufacturing efforts.
Broader Market Context
The rally in Intel shares comes amid a broader market upswing. The Dow Jones Industrial Average set a new intraday record Friday, supported by strong trading in AI names and optimism over progress in Iran war talks, according to Reuters. Art Hogan, chief market strategist at B Riley Wealth, said investors are moving "towards that off-ramp" and markets are showing more "confidence."
Risks and Outlook
Despite the positive momentum, Intel faces significant risks, including tariffs, export controls, Middle East conflict, and China-Taiwan tensions. The company is not scheduled to speak again until the BofA Global Technology Conference on June 2. Without fresh news, sector chatter and geopolitical developments could drive the stock more than company-specific factors.
Intel shares have nearly quintupled since Tan took over as CEO, but the foundry strategy remains unproven and costly. The upcoming trading session Tuesday will be closely watched to see if the stock can sustain its gains.
