Intel's stock soars more than 20% as chipmaker shows signs of a turnaround

Intel's stock price experienced a remarkable increase of more than 20% on Friday, driven by investor enthusiasm over signs of revitalized growth linked to the rising demand for artificial intelligence technologies. By early afternoon, the stock had climbed by 22%, and if it continues to rise beyond 22.8%, it could mark the company's most significant single-day gain since 1973. Under the leadership of CEO Lip-Bu Tan, who took charge early last year, Intel has successfully rekindled Wall Street's interest in the chipmaker, securing investments from both the Trump administration and Nvidia. This strategic maneuvering has enabled Intel to carve out a place in the burgeoning AI sector, a market where it had previously struggled to gain traction. Analysts from Evercore ISI noted, "INTC's new CEO has stabilized the balance sheet and is executing a strategy that seems to have put Intel back on a competitive footing," as they upgraded the stock to a buy rating following the latest earnings report. The company's revenue exceeded expectations, rising by 7.2% to reach $13.58 billion, up from $12.67 billion a year prior, following a trend of year-over-year declines in five of the last seven quarters. Intel's optimistic guidance for the second quarter reflects a significant turnaround for the company, which saw its value plummet by 60% in 2024, ultimately leading to the departure of former CEO Pat Gelsinger in December. Historically, Intel had lagged in the AI race, facing manufacturing delays and waiting for a major customer for its chip fabrication business to emerge. However, CEO Tan signaled a shift in strategy, announcing on social media in January that Intel is making substantial investments in its next-generation 14A manufacturing technology, projected for 2028 or later. During Thursday's earnings call, Tan revealed that multiple customers are currently evaluating the new technology, which is advancing more rapidly than the previous 18A technology. Much of Intel's current growth is being driven by its data center business, with revenue soaring 22% year-over-year to $5.1 billion, propelled by the increasing demand for central processing units (CPUs) as AI applications expand. Tan emphasized that CPUs are essential for the AI era, and analysts at Citi have upgraded the stock to a buy rating, predicting a boost in CPU sales across all suppliers in the coming years.