Intel Stock Soars as AI Narrative Shifts, but Foundry Losses and Server Share Decline Loom

Intel's stock rallies over 200% year-to-date amid CEO's agentic AI vision, but foundry bleeds billions and server CPU share drops to 54.9%.

Intel’s stock has staged a remarkable rally—up more than 200% year-to-date and 450% over twelve months—yet the company’s fundamental picture remains deeply split. The chipmaker is chasing a new AI narrative centered on CPU-driven “agentic” systems while its foundry business bleeds billions and its server market share continues to erode.

Shares traded at around €102 on Thursday, more than six times their 52-week low of €16.69 and roughly 60% above the 50-day moving average. The run-up reflects mounting investor enthusiasm, but with a forward price-to-earnings ratio near 156, the market is pricing in a transformation that Intel has yet to deliver.

Agentic AI: A CPU Comeback Story?

Chief Executive Lip-Bu Tan used a J.P. Morgan conference on May 19 to lay out a vision centered on “agentic AI”—systems capable of independent reasoning and action. Tan argued that this shift could lead to as many as four CPUs per GPU in data center configurations. For Intel, the thesis is crucial: after years of AI spending flowing overwhelmingly to Nvidia’s GPUs, a more CPU-centric infrastructure would refocus demand on Intel’s core product line.

AMD and Nvidia, however, are not standing still. AMD is ramping production of its sixth-generation EPYC “Venice” chips, built on TSMC’s 2nm process, and has outlined a future “Verano” line integrating LPDDR memory for AI workloads. CEO Lisa Su projects the server CPU market will exceed $120 billion by 2030, but AMD sees a CPU-to-GPU ratio closer to 1:1 for agentic AI. Nvidia’s first-quarter revenue hit $81.6 billion—up 85%—with its data center segment alone contributing $75.2 billion. Its Vera CPU aims directly at the market Intel wants to reclaim, with the company projecting $20 billion in Vera revenue next year. Nvidia also authorized an $80 billion share buyback and raised its quarterly dividend, underscoring financial firepower Intel has yet to match.

The market share data is stark. UBS pegged Intel’s server CPU share at 54.9% in the first quarter of 2026, down 950 basis points year-over-year, while AMD held 27.4% and ARM reached 17.7%.

18A Progress and Foundry Ambitions

Intel is betting heavily on its 18A manufacturing process to regain technological leadership. The company reports yield improvements of roughly 7% per month, now exceeding internal plans, putting annual targets in reach by mid-2026. Intel is pushing notebook and PC partners to accelerate their transition to 18A chips, partly because older Intel 7 capacity is being reserved for server and industrial uses. The next CPU generations—Panther Lake and Wildcat Lake—are expected to benefit from a more stable supply chain than their predecessors.

The foundry segment remains a financial drag, posting an operating loss of $2.4 billion in the first quarter. To shore up the balance sheet, Intel bought back its 49% stake in Ireland’s Fab 34 from Apollo Global Management for $14.2 billion, regaining full ownership. Externally, several undisclosed customers are expected to officially tape out chip designs for Intel Foundry in the second half of the year—a critical credibility test.

Reports of a preliminary agreement with Apple add intrigue. The deal could see Intel manufacture selected processors for lower-end iPhones, iPads, and Macs, with testing in 2026 and volume production in 2027. Neither company has confirmed the arrangement; Tan neither confirmed nor denied it on the J.P. Morgan call.

Mixed Financials and Government Ties

Intel’s first-quarter results beat expectations in some areas but revealed persistent weaknesses. Non-GAAP earnings per share came in at $0.29, well above the consensus estimate of $0.01, on revenue of $13.58 billion. The Data Center & AI segment grew 22% year-over-year to $5.05 billion, providing a core growth driver. For the current quarter, Intel guided revenue between $13.8 billion and $14.8 billion and adjusted EPS of $0.20.

The foundry loss, however, underscores the capital intensity of CEO Tan’s turnaround. The company’s valuation assumes rapid improvement in 18A and 14A yields—a schedule the management team has yet to prove.

On the political front, the U.S. government converted roughly $8.9 billion in CHIPS Act grants into an equity stake in August 2025, now holding about 9.9% of Intel. Senior vice president and chief legal officer April Miller Boise sold 40,256 shares on May 1 at a weighted average price of $99.526, with the proceeds totaling around $4.01 million.

Analyst Optimism vs. Execution Risk

Melius Research raised its price target from $100 to $150, reaffirming a buy rating and implying roughly 43% upside from the previous trading level. Analysts cite Intel’s role as America’s leading domestic chipmaker—a factor gaining weight amid geopolitical supply chain debates. The diplomatic U.S. trip to China, while not producing new chip trade agreements, failed to disrupt the upward momentum.

UBS’s market share data serves as a reminder that Intel faces a competitive headwind even as its stock price climbs. The next major test arrives in the second half of 2026, when Intel Foundry must deliver on external tape-outs and Nvidia begins rolling out the Vera Rubin platform. Until then, the stock carries a dual burden: proving the new CPU narrative has real legs and halting the server market share slide that has accelerated under AMD’s assault.