Intel Corporation (INTC) shares closed Tuesday at $110.80, gaining 2.43% and breaking a five-session losing streak. The bounce came as several analysts raised their price targets, citing growing demand for the company's server CPUs in artificial intelligence applications. The stock traded in a range of $102.40 to $113.07 during the session.
The broader technology sector faced headwinds, with the Nasdaq Composite falling 0.84%. Rival chipmakers Nvidia (NVDA) and Advanced Micro Devices (AMD) also declined, dropping 0.77% and 1.65%, respectively. Intel's relative strength stood out amid the selloff, as investors focused on its potential in the AI server market.
Analyst upgrades were a key catalyst. Melius Research's Benjamin Reitzes raised his price target on Intel to $150 from $100, while Citi's Atif Malik boosted his to $130 from $95. Benchmark's Cody Acree increased his target to $140 from $105. Malik noted, “We are constructive on CPU demand,” as AI workloads shift toward inference and agentic AI, which rely more on CPUs for task execution and answering queries rather than just training models.
Intel's recent financial results support the bullish narrative. The company reported first-quarter revenue of $13.6 billion, up 7% year-over-year, with its Data Center and AI segment surging 22%. CEO Lip-Bu Tan stated that the next phase of AI will bring “intelligence closer to the end user,” while CFO David Zinsner highlighted “unprecedented demand for silicon” and efforts to increase supply. Intel projects second-quarter revenue between $13.8 billion and $14.8 billion.
However, challenges remain. Competition from AMD and Arm in server chips persists, and Nvidia's earnings report, due Wednesday after the close, represents a major test for the AI chip sector. Options markets suggest a potential $355 billion swing in Nvidia's market capitalization following the results. Additionally, higher bond yields continue to pressure high-multiple tech stocks.
Intel's foundry business, a key part of its turnaround strategy, faces significant hurdles. J.P. Morgan's Harlan Sur estimated it could take 12 to 18 months to gauge progress, and five years or more for contract manufacturing to become a profitable segment. Seaport Research analyst Jay Goldberg remarked, “No company in history has ever fallen off the Moore’s law curve and made it back on.”
Political factors have also influenced Intel's outlook. President Donald Trump told Fortune that the U.S. government “should have asked for more” after taking a 10% stake in Intel last year with an investment of about $10 billion. Reuters valued the government's total holding at over $50 billion. This stake has added a layer of political support to Intel's strategic initiatives.
Tuesday's rebound may be a relief bounce, but investors face critical questions. The stock's ability to sustain gains will depend on whether this marks a genuine earnings reset or merely another trade ahead of Nvidia's earnings. With the foundry challenge still unresolved and competitive pressures mounting, Intel's path to a full recovery remains uncertain.
