The chip comeback

Like skinny jeans and crop tops, Intel is making a comeback. The old school tech giant just posted earnings that obliterated expectations: Adjusted EPS came in at $0.29, far above the $0.01 Wall Street expected, while revenue rose 7.2% year over year, snapping a streak of declines in five of the past seven quarters.

Guidance for the current quarter came in well above estimates as its data center business continues to grow. Revenue in its data center segment jumped 22% last quarter as AI workloads shifted from training massive models to running agents—pushing demand beyond GPUs (long dominated by Nvidia) and back toward CPUs, Intel’s core business.

The firm is also benefiting from its advanced packaging capabilities: According to CNBC, it’s one of just three chipmakers in the world able to connect multiple chip dies into a unified system.

The ripple effect

While Intel enjoyed a 23.64% surge today—one of its largest single-day gains on record—some other names were lifted by the news as well:

• The US government: After backing Intel as part of its domestic chip push last year, Washington’s $8 billion investment (in exchange for a 9.9% stake) has ballooned to roughly $38 billion—an unrealized gain of nearly $30 billion.
• AMD: Shares jumped 13.91% as Intel’s results reinforced that CPU demand is holding up. Fellow CPU maker Arm Holdings also rose 14.76%.
• Don’t forget about the internet’s favorite punching bag: One guy put his grandma’s $800k inheritance into Intel two years ago, got relentlessly mocked as shares sank, and—if he held—is now sitting on about $1 million in profit. Who’s laughing now?

Wall Street weighs in

For those of you wishing you’d done the same, some Wall Street analysts think there could still be room for Intel to run, even after a 123.77% rally this year and an 84% climb in 2025.

Evercore analyst Mark Lipacis upgraded Intel to Outperform, arguing AI could become far more CPU-heavy, and highlighting a stronger balance sheet and US policy tailwinds. Meanwhile, Jefferies’ Blayne Curtis maintained a Hold, looking for clearer traction with large customers and more progress in the company’s foundry business, but noted that AI momentum is starting to overshadow many of Intel’s earlier concerns.

Morgan Stanley’s Joseph Moore, on the other hand, is less optimistic, and flagged that the vast majority of Intel’s CPUs still sit outside data centers, meaning AI tailwinds only apply to part of the business. He also raised concerns around the structure and visibility of Elon Musk’s Terafab project and Intel’s role in it.

Either way, it comes down to whether the latest AI trade trend actually sticks. If demand structurally shifts from GPUs toward CPUs, that provides real upside for companies like Intel and AMD. So instead of blowing your inheritance on that Ferrari or shiny new watch, maybe follow in that Redditor’s footsteps and make grandma proud.—SY