Shares of Intel surged 11% on Wednesday, closing above $54 and marking the highest level since January 2022. This move extends a rally that saw the stock rise 84% in 2025 and pile on another 47% so far this year. With fourth-quarter earnings set for release after the bell on Thursday, investors appear betting on a turnaround fueled by data center demand and strategic partnerships.
The chipmaker’s data center and AI sales are projected to climb nearly 29% to $4.4 billion, even as overall revenue dips 6% to $13.4 billion compared to last year. Analysts at KeyBanc point to strong orders from hyperscalers as a driver. “We expect outsized data center demand from hyperscalers this year to be a significant tailwind” for Intel’s data center business.
Under CEO Lip-Bu Tan, who took the helm in March 2025, the company has restructured operations, trimmed expenses, and shed jobs to streamline costs. Tan’s push into advanced manufacturing, including the 18A process touted as competitive with TSMC’s 2-nanometer tech, aims to position Intel as the second-largest foundry globally, behind only Taiwan Semiconductor and ahead of Samsung.
Major investments have bolstered this shift. The U.S. government injected $8.9 billion in August 2025, securing a nearly 10% stake now valued at over $20 billion amid the stock’s climb. Nvidia followed with a $5 billion commitment in September, while SoftBank added $2 billion around the same time. These deals not only shore up the balance sheet but also signal potential collaborations, like integrating Intel CPUs with Nvidia’s AI accelerators.
President Donald Trump’s administration has shown vocal support, with Trump posting about a recent meeting with Tan and praising U.S.-made chips. Some speculate this enthusiasm ties into broader efforts to secure domestic semiconductor production, especially as tariffs on foreign chips rise to 25% in certain cases. Rumors even swirl that Apple may have quietly invested, based on Trump’s social media hints, though unconfirmed.
Yet questions linger about the sustainability. Intel’s foundry arm still lacks a major anchor client, and while server CPUs are reportedly sold out for 2026, potentially leading to price increases of at least 10%, the company faces stiff competition from AMD, which rose 8% on the same day, and Micron, up 7%. Broader market gains, including after Trump’s comments on avoiding military action over Greenland, contributed to the lift.
This government backing raises eyebrows—why pour billions of taxpayer dollars into one firm when free markets could drive innovation? Some see it as a necessary bulwark against Chinese dominance in chips, but others whisper of deeper ties between Big Tech, Washington insiders, and military contracts. Intel’s Defense Department deals, including billions for secure manufacturing, suggest national security plays a role, potentially shielding the company from true market forces.
For everyday Americans, the story hits closer to home. Job cuts under Tan’s regime reflect the pain of restructuring, even as stock prices soar. If AI infrastructure spending cools or global PC shipments fall 4% as some forecasts predict, the rally could falter. Options traders brace for an 8% swing post-earnings, underscoring the volatility.
As Intel reports tomorrow, watch for signs of real progress in AI and foundry wins. The surge looks impressive, but in an economy where subsidies prop up giants, true resilience comes from earning market share the old-fashioned way—through competition and ingenuity.
Image by Stratman2 via Flickr, CC BY-NC-ND 2.0.
