Intel Stock Surges 58% in 9 Days on Musk and Google Deals

Intel Corp.’s stock rally accelerated to a historic 58.29% over nine consecutive sessions, driven by a rebound in the server market and a pair of high-profile manufacturing deals that bolster its foundry ambitions against rivals like Taiwan Semiconductor Manufacturing Co.

"The stock's valuation means upside from here is fairly limited," UBS analyst Timothy Arcuri said in a research note, pointing to the share price trading at approximately 20 times the consensus forecast for a 2030 bull case. Despite the rich valuation, Arcuri anticipates the stock will remain "biased to the upside" for the remainder of the year.

The surge, which marks the stock’s best nine-day run on record, was ignited by a combination of improving fundamentals and strategic wins. Intel has increased prices on its server central processing units (CPUs) by about 10 percent as demand from enterprise clients recovers. These clients account for roughly 60 percent of Intel’s server CPU revenue, according to UBS estimates.

The rally underscores a pivotal moment for the U.S. chipmaker, as years of investment in its manufacturing capabilities begin to attract major customers. The recent partnerships signal growing confidence in Intel's ability to compete with TSMC and Samsung Electronics in the advanced chipmaking race, a critical component of its turnaround strategy.

Foundry Wins Signal Turnaround

The most significant drivers of investor optimism are new manufacturing agreements with Google and Elon Musk's Terafab project. Last week, Google announced it would use Intel's latest Xeon 6 processors to power its artificial intelligence training and inference workloads. This was followed by news that Intel will join the Terafab consortium to build custom chips for Musk's portfolio of companies, including Tesla, SpaceX, and xAI.

These partnerships are a major endorsement of Intel's Integrated Device Manufacturing (IDM 2.0) strategy. Unlike competitors AMD and Nvidia, which outsource their manufacturing, Intel designs and produces its own silicon. The collaboration with Terafab, an ambitious AI chip complex in Austin, Texas, could be further enhanced if integrated with Intel's own upcoming Ohio wafer fab, though Arcuri notes this is a "longer-term narrative."

CPU Resurgence in AI Era

While much of the AI hardware focus has been on GPUs from companies like Nvidia, recent developments highlight the critical, and often overlooked, role of CPUs. Dion Harris, head of AI infrastructure at Nvidia, recently told CNBC that CPUs are "becoming the bottleneck" for demanding agentic AI workflows. Intel's price hike on server CPUs reflects a market that is firming up after a period of weakness.

The renewed strength allowed Intel to repurchase the remaining 49% stake in its Fab 34 joint venture in Ireland for $14.2 billion earlier this month, a move that unwound a 2024 deal and signaled a healthier balance sheet. The company's strategic importance was further solidified by a 10% equity stake taken by the U.S. government last August and a subsequent $5 billion technology collaboration with Nvidia, which CEO Jensen Huang called "an incredible investment."

For investors, the recent rally is a sign that Intel's costly and complex turnaround may be gaining traction. While UBS's Arcuri remains cautious on the long-term profitability, the market is rewarding the company for landing key customers for its foundry services. The next major catalyst will be the release of its 14A process node, which Wall Street sees as crucial for attracting a new wave of external clients and reclaiming its manufacturing leadership.

This article is for informational purposes only and does not constitute investment advice.