Intel Shares Surge on Multiple Catalysts Ahead of Earnings

Intel Corporation's stock experienced a dramatic breakout on Wednesday, soaring more than 10% to close at $54.02. This price level marks a new 52-week high for the chipmaker, a peak not seen since early 2022. The surge was driven by a confluence of positive analyst actions, significant government funding news, and a strategic acquisition approval. All eyes are now fixed on the company's quarterly results, scheduled for release after the market closes on Thursday.

The equity's powerful advance was fueled by several specific developments emerging simultaneously.

• A major upgrade from HSBC, which shifted its rating on Intel from "Sell" to "Hold."
• A research note from KeyBanc indicating that server CPU manufacturing capacity for 2026 is effectively sold out.
• An announcement by US Commerce Secretary Howard Lutnick in Davos regarding a $1 trillion investment program designed to bolster the domestic semiconductor industry.
• Regulatory approval for Intel subsidiary Mobileye's $900 million acquisition of Mentee Robotics.

Trading volume exploded to over 74.8 million shares, signaling substantial institutional interest. The stock now trades approximately 145% above its level from a year ago and has nearly tripled since hitting a low of $18.13 in April 2025.

Data Centers and AI Fuel the Optimism

As the traditional PC market continues to face headwinds, demand for artificial intelligence infrastructure is booming. Market experts anticipate a significant 29% revenue jump for Intel's Data Center and AI Division, forecasting it to reach $4.4 billion for the fourth quarter. KeyBanc analysts project that the company could implement price increases of 10% to 15% for its server CPUs, a strong indicator of returning pricing power in this critical segment.

The market's current supply constraints are working in Intel's favor, transforming a previous weakness into a strategic advantage. The company's future growth is closely tied to the successful execution of its "Panther Lake" technology and its advanced 18A manufacturing process.

Should investors sell immediately? Or is it worth buying Intel?

The Crucial Earnings Test

The company faces a critical test with its report on January 23. Consensus estimates project:

• Revenue of $13.4 billion, representing a 6% decline compared to the prior year.
• Adjusted earnings per share of $0.08, down from $0.13 a year earlier.

However, investor focus will be squarely on the guidance for 2026. The market seeks clarity on how CEO Lip-Bu Tan, who took the helm in March 2025, plans to deploy the $8.9 billion in government subsidies received in 2025. A key question is the timeline for a recovery in gross margins. The options market is pricing in potential post-earnings volatility of up to 8%.

Analyst sentiment remains divided. Seaport Research sets a price target of $65, while KeyBanc's target is $60. RBC Capital Markets advises caution at the $50 level. Bernstein analyst Stacy Rasgon maintains a skeptical view with a target of just $36, citing concerns over rising memory costs and the prospect of continued negative free cash flow through at least 2027.

Under CEO Tan's leadership, Intel's restructuring is underway. Strategic moves, including the sale of the Altera division and a $5 billion strategic investment from Nvidia, have helped stabilize the balance sheet. The pressure is now on Intel to execute. Its 18A roadmap is ambitious, and expectations from the market are high.