9 consecutive gains! Intel sets a record, CPU "price hikes" and Musk "options" provide double boost

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Intel’s stock is experiencing its strongest rally ever, but analysts warn that valuation is already rich, potentially limiting further upside.

On Monday, Intel’s U.S. shares closed up 4.52%, marking the ninth consecutive day of gains and setting a record for its best nine-day streak in history. According to Dow Jones market data, the stock has surged 58.29% during this period, with an increase of about 40% over the past month.

The core driving forces behind this rally are the rebound in server CPU demand, product price hikes, and a chip manufacturing partnership agreement with Musk’s Terafab.

However, in a research note on Monday, UBS analyst Timothy Arcuri pointed out that Intel’s current price corresponds to about 20 times the consensus optimistic scenarios for 2030, “meaning the upside at current levels is quite limited.” Nevertheless, he still expects the stock to have a “bias to the upside” for the remainder of this year.

Server CPU Demand Rebounding, Price Hikes Around 10%

Arcuri stated that before Intel releases its quarterly report at the end of the month, he anticipates both results and guidance will be strong, mainly because personal computer demand is “resilient” and server CPU demand is “substantially rising.”

Notably, Intel has raised server CPU prices by about 10%. Arcuri expects demand to continue climbing this year, especially in the enterprise market—which he estimates accounts for about 60% of Intel’s overall server CPU revenue.

Musk’s Terafab Partnership; Ohio Fab Prospects in Focus

Recently, Intel has signed a series of chip manufacturing agreements, boosting investor and Wall Street confidence in its foundry business prospects.

Earlier this month, Intel announced a partnership with Musk’s Terafab, focused on manufacturing chips for Tesla, SpaceX, and xAI. Arcuri noted that if Intel’s Ohio fab is integrated with this joint venture, “it would further enhance market confidence in the foundry business outlook.” However, considering the time required for operational buildout, this is more of a long-term story.

In addition, Intel announced the repurchase of its 49% stake in the Ireland Fab 34 joint venture. Arcuri previously described this as “an important first step in reinjecting operating leverage into its fab financing model.”

14A Process Node: Key Catalyst for Foundry Business Yet to Be Released

Arcuri regards Intel’s upcoming 14A process node PDK as a “key catalyst for the foundry business.” Wall Street generally believes that 14A is critical for Intel to attract external customers and reclaim chip manufacturing leadership.

However, Arcuri also admitted in his Monday report that even if Intel repurchases its stake in the Arizona fab’s semiconductor co-investment program (SCIP) from Brookfield Asset Management, he still has doubts about Intel’s long-term profitability. Intel’s SCIP mechanism allows it to co-invest with outside partners for manufacturing expansion while retaining majority control.

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