Intel saw an unexpected surge in demand for its central processors in the first quarter, driven by companies building AI services — strong enough that it sold chips previously written off.
The turnaround sent Intel’s shares soaring more than 24% to around $83, pushing its market value above $416 billion and surpassing its dot-com era peak.
Rivals AMD and Arm Holdings also gained over 11%, as investors bet that AI inference — the process of generating responses from trained models — could bring CPUs back to the centre of the AI ecosystem after years of dominance by GPUs.
Even Nvidia, which has led the AI boom with its graphics chips, is adapting to the shift, recently unveiling its own central processor in a rare move into CPU territory. Its shares edged higher following the news.
More than 20 brokerages raised price targets on Intel, with analysts pointing to strong demand for its Xeon server chips used in AI data centres.
Chief financial officer David Zinsner said tight supply forced the company to sell legacy and lower-spec inventory that had previously been shelved. While this boosted first-quarter performance, he cautioned that the same benefit may not carry into the second quarter.
Under chief executive Lip-Bu Tan, Intel’s turnaround is gaining momentum. The stock has risen more than 120% this year after an 84% jump last year.
However, the rally has pushed valuations to historic highs — with Intel now trading at around 90 times forward earnings, compared with roughly 37 times for AMD and 22 times for Nvidia — highlighting both renewed optimism and growing expectations for sustained growth.
