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Intel shares soared on Wednesday, jumping roughly 11 percent to their highest level since early 2022, as investors piled into the stock ahead of the company’s quarterly earnings report scheduled for release after the market closes on Thursday. The rally reflects growing optimism on Wall Street that the longtime chipmaker’s restructuring, government backing, and renewed focus on artificial intelligence are beginning to translate into tangible momentum.

The latest move extends a powerful rebound that has seen Intel’s stock climb more than 140 percent over the past year, turning it into one of the strongest large cap performers in the semiconductor sector. Over the past 12 months alone, the shares are now up close to 150 percent, lifting Intel’s market capitalization back toward levels last seen before its multi year slump.

Wall Street Turns More Constructive on Intel’s Outlook

Much of the renewed enthusiasm stems from improving expectations for Intel’s data center and server business. Analysts say demand for the company’s newest server CPUs is accelerating as hyperscale cloud providers ramp up spending on artificial intelligence infrastructure, data centers, and advanced computing workloads.

Earlier this month, analysts at KeyBanc upgraded Intel to the equivalent of a buy, citing signs that the company could be effectively sold out of server CPUs for much of the year. If supply tightens as expected, pricing power could improve meaningfully, offering a boost to margins that have been under pressure for several years.

KeyBanc now sees Intel benefiting from outsized data center demand in 2026, calling it a major tailwind for the company’s core business. The firm set a price target of $60 per share, compared with Wednesday’s close above $54, implying further upside if execution remains on track.

Foundry Business and Advanced Manufacturing Add to the Bull Case

Investors are also closely watching Intel’s foundry ambitions, which are central to its long term turnaround strategy. The company is positioning its manufacturing arm as a credible alternative to overseas chipmakers, with the goal of becoming the world’s second largest foundry behind Taiwan Semiconductor Manufacturing Co., and ahead of Samsung.

Intel has highlighted progress on its 18A manufacturing process, which is widely viewed as comparable to TSMC’s advanced 2 nanometer technology. Industry analysts see this as a critical milestone, particularly as geopolitical risks push governments and corporations to diversify chip supply chains.

The U.S. government has emerged as a cornerstone supporter of this strategy. Following an $8.9 billion investment last year, Washington is now Intel’s largest shareholder, reflecting its strategic importance as the only American company capable of producing cutting edge chips at scale. Since the agreement was reached in August, the value of the government’s stake has increased by an estimated $14 billion, underscoring the stock’s sharp recovery.

Nvidia Partnership Strengthens AI Credentials

Intel has also gained credibility in the AI race through its growing relationship with Nvidia, the dominant player in artificial intelligence hardware. Nvidia became one of Intel’s largest shareholders after investing approximately $5 billion last year, a stake that has since grown by more than $6 billion in value.

The two companies have agreed to collaborate on integrating Intel’s CPUs with Nvidia’s AI accelerators inside Nvidia powered systems. Investors see the partnership as a vote of confidence in Intel’s manufacturing capabilities and a potential pathway to securing major foundry customers over time.

Leadership Changes and Cost Discipline in Focus

Since taking over as chief executive in March, Lip Bu Tan has moved quickly to reshape Intel’s operations. The company has reduced headcount, streamlined management layers, and cut costs as part of a broader effort to restore efficiency and competitiveness after years of execution missteps.

While these changes have not yet fully flowed through to the bottom line, analysts believe they are laying the groundwork for more sustainable profitability, particularly if revenue growth in AI related segments continues to accelerate.

Earnings Expectations and Sector Wide Momentum

Heading into Thursday’s earnings report, Wall Street expects Intel to post a roughly 6 percent decline in fourth quarter revenue compared with a year earlier, bringing sales to about $13.4 billion, according to consensus estimates. However, the outlook for data center and AI related revenue is far more optimistic, with analysts forecasting a nearly 29 percent year over year jump to approximately $4.4 billion.

The rally in Intel shares also lifted sentiment across the broader semiconductor sector. Advanced Micro Devices rose about 8 percent on Wednesday, while Micron Technology gained roughly 7 percent, as investors rotated into chip stocks amid improving macro sentiment.

Markets more broadly were supported by easing geopolitical concerns after President Donald Trump said he would not use military force to pursue control of Greenland, helping reduce risk aversion and amplify gains in technology and industrial names.

As Intel prepares to report earnings, investors are now looking for confirmation that the company’s AI strategy, manufacturing investments, and partnerships are translating into durable growth. If management delivers encouraging guidance, many on Wall Street believe the stock’s multiyear recovery could still have room to run.

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