The most optimistic moment in a long time! Intel's stock price soars on the eve of its earnings report.

After years of strategic missteps and loss of market share, chip giant Intel is regaining favor on Wall Street, driven by strong expectations for data center demand and massive external investments. On the eve of its highly anticipated quarterly earnings release, Intel’s stock closed up more than 11% on Wednesday, soaring to its highest point since January 2022. This strong performance led the company’s market capitalization to surpass $250 billion for the first time since 2022. After recording an 84% increase last year, the stock has risen about 35% so far in 2026, with a cumulative increase of 149% over the past 12 months. The sharp turnaround in market sentiment is mainly due to optimism about Intel’s data center business and recognition of the aggressive reforms initiated by its new CEO, Chen Liwu. Gabelli Funds analyst Ryuta Makino told Reuters: "I think this is the most optimistic that people have felt about the company in a long time; recent strategic moves are very favorable." Wall Street generally regards the earnings report to be released after Thursday’s market close as a key litmus test for Intel’s recovery. In addition to performance expectations, Intel has also benefited from a broad semiconductor sector rebound and strong external strategic investor endorsements. Critical shareholders, including the U.S. government and Nvidia, strengthened the company’s balance sheet through investments last year. On Wednesday, chip stocks broadly rose, with competitor AMD up about 8% and Micron Technology up 7%. Market sentiment was also buoyed by comments from U.S. President Trump stating he would not use force to acquire Greenland. **Explosive Data Center Demand & Pricing Power Returns** The core driver reigniting investor interest in Intel is the robust recovery of its server chip sales. Analysts point out that although Nvidia’s GPUs dominate AI workloads, major tech companies still need to purchase large quantities of Intel’s traditional server CPUs when rapidly building data centers. According to estimates from FactSet and LSEG, Intel’s data center and AI revenue is expected to surge by nearly 29-30% to about $4.4 billion. KeyBanc’s analysts earlier this month upgraded Intel’s stock rating to “buy” and set a target price of $60. They noted that Intel’s server CPUs may be sold out this year, which could lead to higher prices. “We expect excess data center demand from hyperscale cloud providers to be a significant tailwind this year,” wrote KeyBanc analysts in their report. Ryuta Makino echoed this view, believing that server CPU prices will see at least double-digit growth in 2026, forming a crucial part of the bullish case for Intel. **Giant Investments & Ambitions in Foundry Business** Intel’s “comeback” relies not only on product sales but also on the overhaul of its capital structure and foundry ambitions. Under CEO Chen Liwu’s leadership, the company has substantially improved its finances by bringing in external capital. According to CNBC, after a $8.9 billion investment last year, the U.S. government has become Intel’s largest shareholder. This is partly because Intel is the only U.S. company capable of manufacturing advanced chips. Furthermore, AI chip leader Nvidia invested $5 billion last year, becoming one of its top shareholders; SoftBank also injected $2 billion. Nvidia and Intel have reached an agreement to integrate Intel CPUs into Nvidia systems. In the foundry sector, Intel is striving to establish itself as the world’s second-largest chip foundry, trailing only TSMC. The company has been vigorously promoting its 18A manufacturing process, which is regarded as equivalent to TSMC’s 2nm process. Although the business is still seeking major customers, market speculation over future orders has been sparked by manufacturing tests conducted by Nvidia and Broadcom. **PC Market Concerns & Profit Margin Pressure** Despite strong market sentiment, Intel’s fundamentals are not flawless. Analysts expect the company’s total fourth-quarter revenue to decline 6% year-over-year to $13.4 billion. In the personal computer (PC) segment, Intel faces a mixed picture. Although it launched the “Panther Lake” chips based on the 18A process, revenue from this division is expected to grow only 2.5% to $8.21 billion. Analysts warn that memory prices, driven up by global supply shortages, may increase laptop costs and suppress demand. Intel continues to lose market share in PCs to AMD and designs based on the Arm architecture. Profit margins also face pressure. Due to costly efforts to fix its manufacturing segment, adjusted gross margin is expected to fall by about 6 percentage points to 36.5% in Q4. According to Reuters, although the yield of the 18A process is improving every month, currently only a small fraction of chips meet customer standards, and full-scale commercial production remains uncertain. Risk Disclosure and Disclaimer The market involves risks, and investments should be made cautiously. This article does not constitute individual investment advice and does not take into account any user’s specific investment objectives, financial situation, or needs. Users should consider whether the opinions, views, or conclusions in this article suit their particular situation. Investment decisions based on this article are at your own risk.