Intel stock (NASDAQ: INTC) soared as much as 28% in premarket trading on Friday after the chipmaker posted stronger-than-expected first-quarter earnings.
The company issued second-quarter revenue guidance that topped Wall Street forecasts.
For a company long written off as a laggard in the AI race, the move was a sharp reminder that sentiment can change quickly when numbers improve and management finally offers a cleaner narrative.
Intel stock: Quarter that changed the mood
Intel reported first-quarter revenue of $13.6 billion, above estimates of $12.4 billion while adjusted earnings came in at 29 cents a share, versus an estimate of 1 cent.
The company also projected second-quarter revenue of $13.8 billion to $14.8 billion and adjusted profit of 20 cents a share, both ahead of expectations.
Intel stock jumped 19% in after-hours trading on Wednesday before extending the gain in premarket trading the next morning.
The operating story underneath the headline was even more important.
Intel’s data center and AI division delivered $5.1 billion in revenue, beating estimates.
The management said demand for server processors used in AI data centers is improving as cloud customers shift from training large models to deploying them.
CFO David Zinsner also said Intel was able to sell some finished-goods inventory it had previously expected to write off, including older or poorly functioning chips.
Why are bulls getting louder
The biggest reason optimism has returned is that Intel finally has a tangible foundry win to point to.
Tesla will use Intel’s next-generation 14A manufacturing process for its Terafab project, making Tesla Intel’s first major customer for the technology.
The broader Terafab plan involves Tesla, SpaceX and xAI, with Musk describing the project as part of a much larger effort to build custom chips for vehicles, robots and AI data centers.
That matters because Intel’s foundry strategy has been judged less on ambition than on customer proof.
Zinsner said the details of the partnership are still being worked out, and he declined to give financial terms.
Why the sell calls are still alive
The skepticism has not gone away because the turnaround still rests on execution.
Intel reported a first-quarter GAAP loss of 73 cents a share after more than $4 billion in restructuring charges, even though adjusted earnings were positive.
The stock was trading at about 90 times forward earnings, a rich valuation for a company that is still rebuilding profitability and trying to prove it can compete consistently with TSMC and Nvidia-backed rivals.
That caution shows up in the analyst data.
MarketBeat shows Intel with a consensus rating of Hold, based on 11 Buy ratings, 24 Hold ratings and 5 Sell ratings from 40 analysts.
The average price target is $54.86, far below where the stock is now trading after the rally.
In other words, the market may be pricing in a successful transformation, but many analysts are still pricing in a more ordinary recovery.
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