Intel Stock Rockets 14% as AI Chip Breakthrough Fuels Massive Turnaround Hopes
Intel's 13% surge to $124 isn't hype, it's the first proof that Pat Gelsinger's painful restructuring is finally delivering in AI chips and foundry wins.
Intel shares exploded more than 13 percent Thursday, hitting $124.49 and lifting the company's market value past $530 billion. The catalyst was concrete: accelerating demand for Gaudi 3 AI accelerators, fresh design wins with hyperscalers, and an upgraded full-year 2026 revenue outlook that beat Wall Street expectations.
This wasn't a dead-cat bounce. First-quarter revenue reached $12.7 billion with a narrower loss than forecast, driven by cost cuts and a Data Center and AI segment that is ramping Gaudi 3 shipments faster than analysts anticipated. For the first time in years, investors are treating Intel's multi-year turnaround under CEO Pat Gelsinger as credible rather than a prayer.
Gelsinger split the company into separate foundry and product groups, poured capital into new process technology, and began landing external customers for its fabs. The 18A process node, slated for production later this year, now looks capable of challenging TSMC directly. Analysts highlighted Gaudi 3's performance-per-dollar edge in certain training and inference workloads, a detail buried in the results that suddenly matters to cost-conscious cloud operators.
Wall Street responded in kind. Multiple firms raised price targets; the consensus 12-month target now clusters between $145 and $160, with some bulls eyeing $200. The average rating improved to Moderate Buy. After two years of watching Intel bleed share to Nvidia in AI accelerators and AMD in CPUs, the street is betting the worst is over.
Yet the risks are still baked in. Intel continues to burn cash on new fabs, profitability remains uneven, and any stumble in the 18A ramp could puncture the new optimism. Competition from Nvidia's entrenched position and AMD's CPU strength has not disappeared. Geopolitical tension with China and supply-chain snarls linger. What has changed is the tailwind: substantial CHIPS Act support for a premier U.S. manufacturer.
The real test is whether Gelsinger can convert today's momentum into consistent profitability by the end of 2026 and build a second high-margin foundry business. Thursday's surge proves the market is willing to price that possibility again. The journey from laggard to contender is unfinished, but the valuation reset just got a lot more expensive for the skeptics.
Original reporting: Ibtimes.com.au.
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