Shares of Intel (INTC) jumped by more than 11% on Monday amid speculation that the company may have won one of the biggest foundry deals in its history. Alphabet's (GOOG) (GOOGL) Google is planning to use Intel's manufacturing services to produce more than three million Tensor Processing Units (TPUs). It is also reported that Nvidia (NVDA) is assessing the foundry technology of Intel for its future AI processor. No formal agreements have been made yet, though.
This comes at a time when the focus on semiconductor manufacturing capacity continues to grow. There is huge demand for accelerators and other elements of AI infrastructure, including advanced packaging, wafer fabrication, and supply chain diversification. In case Intel manages to cement its place as a manufacturer for top AI companies, then there is a good chance that its growth prospects might get considerably strengthened.
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About Intel Stock
Intel Corporation is one of the biggest semiconductor manufacturers in the world, producing processors, accelerators, network systems, and other advanced semiconductor products. The company was founded in California and currently has a market capitalization of around $498 billion.
INTC stock has seen quite an extraordinary recovery in the last 12 months. As of now, Intel trades at close to $106 per share, up by about 482% since its 52-week low of $18.97. Although the share price reached its peak of $132.75, the current price still remains around 17% off the highs. The performance is much higher than that of the S&P 500 Index ($SPX).
www.barchart.com One of the more contentious parts of the Intel story relates to valuation. Currently, Intel trades at 10.6 times sales and 176.6 times forward P/E. Both multiples seem quite expensive compared to historical levels and to those of typical semiconductor stocks. However, the reason why these ratios continue to trade at a premium is associated with the potential of Intel as a manufacturer of AI accelerators and a provider of foundry services for major hyperscale clients.
Intel Earnings Report
For Q1 2026, Intel reported revenue of $13.6 billion versus expectations of $13.2 billion, resulting in growth of 7% compared to the year-ago quarter. Non-GAAP EPS amounted to $0.29 vs. estimates of $0.27, growing by more than double compared to a year ago, when the company posted earnings of $0.13. The gross margin increased to 41.0%, while non-GAAP operating margin climbed to 12.3%.
For Q2 2026, Intel expects revenue between $13.8 and $14.8 billion and GAAP EPS of $0.20. The guidance implies stable performance in Intel's business while the company invests in scaling manufacturing capacity as well as expanding advanced packaging operations.
CEO Lip-Bu Tan said that the next generation of AI will move from training towards inference and agentic use cases, which creates a lot of demand for CPU chips and wafer fabrication. This is especially relevant as it follows recent news related to negotiations between Intel and both Google and Nvidia regarding the manufacturing of AI accelerators and processors. If Intel wins the manufacturing deal with Google, then its strategy will receive considerable endorsement.
There are further signs of stabilization at the company. First, Intel delivered another quarterly result that surpassed management's expectations, making this the sixth quarter in a row where results were better than expected. Second, Intel continued to scale down its costs through efficiency efforts, with R&D and operating expenses going down year-over-year (YoY).
What Analysts Think About INTC Stock
Despite quite a remarkable recovery in the last 12 months, Wall Street continues to be relatively neutral on INTC with a “Hold” consensus rating. While investors seem to have become increasingly positive about Intel's foundry aspirations, analysts remain skeptical about execution risks and huge investments into foundry infrastructure. The current target price range goes from $45 to $150 with a mean price of $90.58. As a result, based on the current INTC share price of about $106, there might be some downside pressure on the stock.
www.barchart.com On the date of publication, Yiannis Zourmpanos 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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