Intel Corp. (INTC) surged nearly 30% at one point last week on the back of significantly better quarterly results, while also setting a record high for the first time since 2000. Think about that...it took 26 years for the company to exceed its dot-com era peak, observes Amber Kanwar, host of the In the Money with Amber Kanwar podcast.
The pop followed an 80% rally so far this year. It also dragged the semiconductor sector higher for a record-smashing 18 sessions in a row.
Intel's earnings and sales blew past expectations because it’s finally reaping the benefits of AI demand. Intel doesn't make the cream of the crop chips needed to run AI systems (GPUs). But it makes central processing units (CPUs) which are used to run smaller workloads and overall workflow. The company is also benefitting from a halo effect after Elon Musk said he would use Intel technology in his chipmaking efforts.
Put all of this together and Intel's forecasted profit is much higher than Street expectations. It is a stunning turnaround under CEO Lip-Bu Tan and a windfall for the US government, which is sitting on a paper gain of $37 billion.
“It has been easy to not like (Intel),” wrote Evercore's Mark Lipacis in an upgrade Friday, lamenting years of ceding market share and technological edge. “But three things have changed: 1) CPU Renaissance…2) Improved Execution…and 3) Geopolitical Dynamics.”
