Shares of Intel surged more than 22% in premarket trading and moved toward a potential record high after the chipmaker issued a strong revenue forecast, signaling rising demand for processors used in artificial intelligence workloads.
The upbeat outlook highlights how AI-driven CPU demand is opening new growth opportunities for Intel, which is seeking to regain momentum after lagging behind competitors in the early stages of the AI boom.
The company forecast second-quarter revenue above Wall Street expectations, prompting multiple brokerages to raise price targets. Chief Financial Officer David Zinsner said the outlook partly reflects higher chip pricing, while noting that manufacturing execution risks could affect how much demand Intel ultimately captures.
AI demand reshapes outlook
Analysts say demand for central processing units, particularly Intel’s Xeon server chips used in data centres and AI inference, is strengthening the company’s position in the market.
Intel had previously trailed rivals such as Nvidia and Taiwan Semiconductor Manufacturing Company in AI-focused hardware, but evolving AI workloads are increasing the relevance of CPUs alongside graphics processors.
Broader chip stocks rise
The positive forecast lifted sentiment across the semiconductor sector. Shares of Advanced Micro Devices rose around 7%, while U.S.-listed shares of TSMC gained about 3%.
Intel’s stock has nearly tripled since August, supported by policy backing for domestic chip production and restructuring efforts under CEO Lip-Bu Tan.
Foundry ambitions gain momentum
Intel is also advancing its contract manufacturing strategy. The company recently secured Tesla as a customer for its next-generation 14A chipmaking process linked to future AI infrastructure.
Analysts say such developments could strengthen Intel’s position as it aims to build a competitive foundry business over the coming years.
Despite the rally, Intel’s valuation has climbed significantly, trading at a higher forward earnings multiple than some competitors, reflecting both investor optimism and ongoing execution risks.
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