Finance
Intel Set for Record High as AI-driven Cpu Demand Powers Upbeat Forecast
Published by Global Banking & Finance Review®
Posted on April 24, 2026
3 min readLast updated: April 24, 2026
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Intel shares surged over 22% in premarket trading on Friday, fueled by a strong AI-driven CPU demand outlook that could push the stock to its first record high since 2000—reflecting investor optimism over its turnaround and foundry ambitions.
Intel soars on signs AI boom for CPUs is here
Intel’s AI-Driven Turnaround and Market Impact
By Aditya Soni and Rashika Singh
Record-Breaking Stock Performance
April 24 (Reuters) - Demand for Intel's central processors from firms offering AI services was so strong in the first quarter that it sold even chips it had originally written off, a remarkable turnaround that sent the company's shares soaring on Friday.
The stock was 28% higher at $85 in premarket trading, on course to open at a record high that would surpass its 2000's dot-com era peak and add more than $90 billion to the company's market value, lifting it above $420 billion.
Competitors Respond to AI Inference Surge
Rival AMD and Arm also gained 7% each on growing conviction that inference - the process by which artificial intelligence answers user queries - could restore central processing units to the heart of the industry after years of being eclipsed by graphics chips used in AI training.
Nvidia’s Strategic Shift
Nvidia, the graphics chip giant that has dominated the AI boom, has also sensed the shift and braced for greater competition. It unveiled last month a new central processor, a rare move into territory it had long ceded to rivals.
Its shares were little changed on Friday.
Analyst Reactions and Financial Outlook
At least 14 brokerages raised their price targets on Intel's stock following the better-than-expected first-quarter results and a sales forecast above estimates, with HSBC pointing to growing demand for Intel's Xeon server CPUs used in AI data centers.
Supply Constraints and Inventory Strategy
CFO David Zinsner said the forecast was partly driven by higher prices and supply was tight in the first quarter, which forced Intel to dig into finished goods inventory and sell chips it had not expected to move.
"It was either de-spec product or legacy product we had shelved and then we worked with customers. That helped a lot. I am not sure we have that benefit in the second quarter," he said.
Intel’s Ongoing Transformation
Intel shares have already gained about 80% this year, after a jump of about 84% last year, as its turnaround gathers steam under CEO Lip-Bu Tan after years of missteps.
It now trades at around 90 times its 12-month forward earnings estimates - its highest on record - much higher than the 37 times for AMD and 22 for Nvidia.
Contract Manufacturing Ambitions
Earlier this week, Intel scored a symbolic boost to its contract manufacturing ambitions by securing Tesla as a customer for its next-generation 14A chipmaking process tied to Elon Musk's planned Terafab AI chip complex.
Industry Expert Perspective
"If the foundry business can start contributing in a meaningful way in 2027 - as expected - that should really show that the company's turnaround is complete," said Bob O'Donnell, president and chief analyst at TECHnalysis Research.
(Reporting by Rashika Singh, Zaheer Kachwala and Aditya Soni in Bengaluru; Editing by Mrigank Dhaniwala and Devika Syamnath)
Key Takeaways
- •Intel projected Q2 revenue well above Wall Street’s expectations, led by rising demand for AI server CPUs; Q1 revenue also beat forecasts by about $1.4 billion. (investing.com)
- •The stock’s premarket rally positions it to eclipse its dotcom-era highs of the early 2000s, boosting valuation by roughly $75 billion. (investing.com)
- •Intel’s foundry strategy gained momentum with reports of a major partnership involving Tesla’s Terafab using its 14A process—though some sources note the deal is still exploratory. (tomshardware.com)
References
Frequently Asked Questions about Intel set for record high as AI-driven CPU demand powers upbeat forecast
1Why did Intel shares jump more than 22% in premarket trade?
Intel's robust revenue outlook, driven by strong demand for AI hardware, led to the share surge.
2How is Intel benefiting from AI-driven CPU demand?
Growing usage of CPUs in AI workloads, especially in agentic AI systems, is boosting Intel's sales and forecast.
3What role does the Tesla deal play in Intel's future?
Securing Tesla as a customer for its 14A chipmaking process strengthens Intel’s contract manufacturing ambitions.
4How does Intel's valuation compare with AMD and Nvidia?
Intel is trading at 90 times its 12-month forward earnings, much higher than AMD (37.2x) and Nvidia (22.1x).
5Which factors have contributed to Intel's recent turnaround?
Leadership changes, cost controls, government backing, and new partnerships have helped bolster Intel's position.
