Intel (INTC) Stock Soars After CEO Says CPUs Are Now the Backbone of AI

TLDR

• Intel reported Q1 EPS of $0.29, crushing the $0.01 consensus estimate by $0.28
• Revenue came in at $13.58 billion, well above the $12.32 billion expectation
• Data center revenue jumped 22% year-over-year to over $5 billion
• CEO Lip-Bu Tan says CPUs are becoming a critical layer in AI infrastructure
• INTC stock hit a 52-week high of $87.10, with KeyCorp raising its target to $110

Intel just posted one of its strongest quarters in years, and Wall Street took notice.

Intel Corporation, INTC

The chipmaker reported Q1 2026 EPS of $0.29, blowing past the analyst consensus of $0.01. Revenue hit $13.58 billion, topping expectations of $12.32 billion by more than a billion dollars. The stock surged on the news, touching a 52-week high of $87.10.

For a company that spent much of the past few years playing catch-up, it’s a welcome change of pace.

The standout was Intel’s data center division. Revenue from that segment rose 22% year-over-year to over $5 billion. That growth is being driven by something that wasn’t part of the AI conversation just a year ago — demand for CPUs.

GPUs have dominated the AI hardware story. But as companies build out agentic AI systems, CPUs are stepping back into the spotlight.

CPUs Find a New Role in AI

Agentic AI — systems that autonomously retrieve data, make decisions, and complete multi-step tasks — relies heavily on CPU-based orchestration. While GPUs handle raw inference workloads, CPUs manage the coordination between tasks and agents.

The GPU-to-CPU ratio for these workloads has already shifted from 8-to-1 down to 4-to-1. Tan believes that ratio could move toward parity over time, which would represent a major increase in CPU demand.

Intel is well positioned here. The company designs and manufactures its own CPUs, and even produces the silicon wafers used to make them. That end-to-end control is a real advantage.

Intel also recently bought out the remaining 49% stake in its Fab 34 facility in Ireland that it didn’t already own, funded through a multi-tranche bond sale. The move strengthens its manufacturing footprint and was seen as a positive signal on balance sheet confidence.

Analyst Targets Revised Higher

The earnings beat triggered a wave of price target upgrades. KeyCorp moved its target from $70 to $110 with an “overweight” rating. Morgan Stanley raised its target from $56 to $73, keeping an “equal weight” rating. DA Davidson lifted its target from $45 to $77 with a “neutral” rating.

Northland Securities bumped its FY2026 EPS forecast to $0.58 and FY2027 to $0.74, maintaining an “Outperform” rating with a $92 price target.

Not everyone is convinced the run has more legs. Rosenblatt Securities kept a “sell” rating, raising its target from $30 to $50. Barclays also flagged caution, suggesting the rally may be getting stretched. The stock’s consensus rating remains “Hold” with an average target of $72.98.

Of 40 analysts covering INTC, 11 rate it a Buy, 25 a Hold, and 4 a Sell.

On the institutional side, Van ECK Associates holds over 55 million Intel shares valued at roughly $1.86 billion. Sumitomo Mitsui Trust Group holds over 11.6 million shares.

Intel set Q2 2026 EPS guidance at $0.20, and the full-year analyst consensus sits at $0.17 EPS.

The stock opened at $84.52 on Wednesday, with a market cap of approximately $422 billion.

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