Intel (INTC) investors have a big few days ahead. The chipmaker reports quarterly results after the market closes on Thursday, and Wall Street is watching closely to see if the recent turnaround story keeps building momentum.
One firm already has a strong opinion. Wedbush believes Intel could beat expectations this quarter, pointing to stronger server demand, rising prices, and margins that may hold up better than consensus estimates.
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INTC stock has already climbed sharply this year as the company works through a major restructuring under CEO Lip Bu Tan, who took over in March 2025.
www.barchart.com Intel's Data Center Business Is Key
Intel's server chip business is a key long-term revenue driver that faces competition from peers such as Nvidia (NVDA) and AMD (AMD). For years, rivals chipped away at Intel's market share in data centers, a business that once brought in more than 90% share for Intel.
Demand for CPUs, the chips that handle everyday computing tasks, is rising again because of how artificial intelligence gets used. Training an AI model leans heavily on GPUs. But running that model day to day, especially for AI agents that plan, search, and complete tasks on their own, needs a lot more CPU power. This shift is a big reason Wedbush expects Intel's server business to grow.
As per a Proactive report:
Wedbush explained that Intel's own guidance points to sales growing more than 5% from the prior quarter, matching what analysts already expect. The firm is modeling data center revenue growing about 10% from the previous quarter and 40% compared with a year earlier, with server demand doing much of the heavy lifting. Wedbush also said that higher prices on Intel's server chips could explain a large chunk of that expected growth. The firm noted that more price increases may already be in motion and that Intel is also freeing up extra production capacity as it ramps its 18A manufacturing process for PC chips. Put together, Wedbush thinks server revenue could come in above its own estimates.PC Chip Prices and Margins Could Offer an Upside Surprise
Wedbush pointed out that PC chip prices have been climbing at roughly the same pace as server chips. The Proactive report also stated:
Intel's outlook for this segment looked cautious earlier, mostly because PC demand had softened as costs rose for consumers. But steadier pricing gives Wedbush more confidence that PC revenue can still grow modestly from the previous quarter.Intel had guided for weaker gross margins this quarter, largely because of two factors.
First, the company lost a one-time benefit tied to selling off previously scrapped products. Second, ramping up 18A production comes with real costs.Even so, Wedbush expects margins to land better than Intel's own forecast, thanks to firmer pricing and yield improvements, meaning fewer defective chips coming off the line, across both the newer 18A process and Intel's older manufacturing nodes.
What's Next for INTC Stock?
Wedbush warned that even a strong Q2 might not be enough to push INTC stock higher if broader market sentiment remains bearish.
Worries about China's progress in artificial intelligence, general economic uncertainty, and questions about how much big tech companies will keep spending on data centers have all weighed on investor sentiment.
Wedbush thinks Intel may still be a good stock to own since demand for computing power, including for AI inference workloads (the stage where a trained AI model actually answers questions or completes tasks), keeps growing. Still, the firm cautioned that Intel's valuation could make the stock more sensitive to swings in the broader market.
For now, Wedbush is keeping its “Neutral” rating on Intel with a price target of $60. That target is based on a multiple of roughly 40 times the firm's fiscal 2027 earnings estimate of $1.53 per share.
Wedbush acknowledged that the multiple sits above Intel's own historical average, but the firm said improving near-term results and a more encouraging longer-term outlook from management justify sticking with its current call.
Out of the 45 analysts covering INTC stock, 11 recommend “Strong Buy,” one recommends “Moderate Buy,” 31 recommend “Hold,” and two recommend “Strong Sell.” The average INTC price target is $108.68, above the current price of about $105.
www.barchart.com On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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