Two years ago it was a "survival issue," now Intel's stock price is at a historic high—what did Chen Liwu do right?

Two years ago, Intel faced a “life-and-death crisis.” Now, the chip giant’s stock has reached a historic high, and with a financial report far exceeding expectations and a record-breaking stock surge, it has proven its recovery potential to the market.

Last Friday, Intel’s stock soared 28% at one point, marking the largest single-day gain since 1987. It ultimately closed up about 21%, breaking past the previous peak from the dot-com era. The surge was directly driven by the Q1 financial report: revenue reached $13.6 billion, versus analysts’ expectations of $12.4 billion—about 9.3% higher. Adjusted EPS was $0.29, beating the $0.01 expected. Q2 revenue guidance midpoint is $14.3 billion, compared to the $13.1 billion expected.

All three core indicators exceeded expectations, driven by strong server CPU demand fueled by the rapid adoption of agentic AI applications.

John Pitzer, Intel’s VP of Investor Relations, called the earnings “compelling evidence of real progress at the execution level.” Seaport Research analyst Jay Goldberg pointed out that Intel is now on “the strongest foundation in years.”

From a “life-and-death crisis” to historic highs, the core of this turnaround lies in CEO William Chen seizing the structural change brought by new AI application forms. The market’s next focus: can the 14A process deliver, and can the foundry business establish a sustainable customer base.

Why did Intel fall into a survival crisis?

Two years ago, Intel’s situation was far more dire than the public realized. Goldberg said bluntly that Intel’s survival was “a life-and-death issue” and that the company had “completely lost direction” technologically.

In Goldberg’s opinion, one of Intel’s most fatal mistakes was failing to adopt extreme ultraviolet lithography (EUV) equipment—the core tool for manufacturing advanced chips—promptly, unlike TSMC. By then, TSMC had surpassed Intel in chip manufacturing and was producing chips for Intel’s main CPU competitor, AMD.

During former Intel CEO Pat Gelsinger’s tenure, he pushed to revive US domestic manufacturing, leading more than $100 billion investment plans in Arizona, New Mexico, Oregon, and Ohio, making Intel the biggest beneficiary of the Biden Administration’s Chips and Science Act. However, Goldberg notes Gelsinger failed to effectively cut costs, did not improve company culture to motivate staff, and relied too much on stock buybacks and other short-term means to boost stock prices, somewhat sacrificing Intel’s long-term technological edge.

Challenge after five months in office: a political storm reversal

In March 2025, William Chen became Intel CEO. Five months later, political pressure suddenly hit—Trump publicly demanded his immediate resignation on Truth Social.

Within a week, the situation reversed. Trump later posted about a “very interesting” meeting with Chen. Subsequently, the US government announced it would acquire a 10% stake in Intel, which investors saw as a vital lifeline.

Over a longer timeline, Chen’s reforms since taking office have already shown effect. Intel VP of Investor Relations John Pitzer said the company’s foundry capacity exceeded expectations and built closer collaborative relationships with customers.

“CPU Renaissance” and Process Breakthrough: AI Form Change Reshaping Market Structure

The core logic of Intel’s rebound lies in the structural change of AI application forms. Evercore ISI analyst Mark Lipacis called the trend a “CPU Renaissance”—with the rise of agentic AI tools, AI systems capable of handling complex tasks autonomously will sharply increase CPU demand, and the CPU-to-GPU ratio may flip from 1:8 to 8:1.

Lipacis noted since Chen took office, Intel’s operating margin has improved by 500 basis points and its debt situation has also improved. As a leading chipmaker, Intel’s strategic value is becoming more prominent in an era of intensifying geopolitical tensions.

Ivan Feinseth, analyst at Tigress Financial Partners, gave positive comments on Chen’s leadership, saying he is “just the kind of CEO Intel needs” and noted Chen has made substantial execution improvements while continuing Gelsinger’s foundry strategy.

There are positive signals in process technology as well. Intel VP of Investor Relations John Pitzer said the cycle time and yield of the latest 18A process node are better than expected, and customer discussions for the next-generation 14A process node are “going very well.”

Notably, Tesla CEO Elon Musk said in this week’s earnings call that his Terafab chip manufacturing project will use Intel’s 14A process, providing further endorsement for its commercial prospects. Pitzer noted Musk and Chen share similar views on driving chip innovation and addressing AI-driven supply/demand gaps.

After Intel’s peak, what’s the next challenge?

Despite Intel’s recent performance boosting market sentiment, analysts remain cautious about its long-term prospects. Goldberg noted in a report that Intel is “basically out of mid-term survival danger” but the viability of its foundry business is still uncertain. Whether it can attract enough external clients will be the key variable for Intel to return to the forefront of chip manufacturing.

Intel’s story is far from over. While the stock’s historic high is encouraging, the market’s final verdict will depend on whether the 14A process can deliver and if the foundry business can truly establish a sustainable customer base.

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