Intel Corp (NASDAQ:INTC, XETRA:INL) shares surged 24% to around $83 on Friday following stronger-than-expected quarterly results, with analysts at Wedbush and Jefferies pointing to accelerating AI-driven demand for server chips and improving near-term visibility for the company’s manufacturing roadmap.
According to Wedbush, the quarter reinforced that compute demand, particularly for server CPUs, has become the dominant near- to intermediate-term growth narrative for Intel Corporation.
The firm doubled its price target on the stock to $60 but maintained its ‘Neutral’ rating.
“While we aren't quite on-board with the latter view, Intel indeed seems best positioned to serve the unexpectedly strong growth in server CPU demand being driven by inference workloads and argentic,” they wrote.
The firm noted that management indicated customer demand for server compute was unexpectedly strong and, in some cases, underserved, with demand described as running ahead of supply. This strength is increasingly tied to AI inference workloads, which are driving higher requirements for data center infrastructure.
Wedbush also highlighted expectations for continued unit growth through 2026 and potentially into 2027, suggesting a more durable demand cycle than previously assumed.
The analysts further pointed to improving execution on Intel’s manufacturing roadmap, noting that yields on the 18A process node are progressing faster than anticipated.
They also flagged commentary around the 14A node, where Intel indicated it is designing more future internal tiles on the process, a signal they interpreted as growing confidence in both technical progress and potential external customer demand. ASIC revenue was another bright spot, with growth of more than 30% sequentially and a run rate approaching $1 billion, with additional upside suggested.
The firm also noted that PC demand may stabilize as customers rebuild inventories from historically low levels, though it still expects weakness in the broader PC market later in the year. While Wedbush remained cautious on valuation, it said the improving fundamentals in AI-driven compute support a more stable outlook than in prior quarters.
Jefferies similarly emphasized that AI tailwinds are reshaping demand dynamics across Intel’s server and accelerator businesses.
“Intel results were better but the more important takeaway is the validation of AI tailwinds driving significant server CPU and XPU demand,” they wrote, noting that the expansion of XPU usage is directly contributing to higher server processor requirements.
Jefferies highlighted double-digit growth in server units and said momentum is expected to extend into 2027, though it suggested competitors such as AMD may be better positioned in certain high-end segments over time.
Jefferies also noted strength across Intel’s broader business segments, including solid performance in client computing and foundry operations, supported by improved margins driven by higher volumes and manufacturing efficiency gains. AI PC adoption was highlighted as a growing contributor within the client segment, while foundry revenue benefited from increased adoption of advanced process technologies.
At the same time, the firm pointed to softening conditions in the traditional PC market, with management signaling expectations for weaker demand in the second half of the year.
Both research notes framed Intel’s results as being driven by stronger-than-expected AI-related compute demand, particularly in server CPUs, alongside incremental improvements in manufacturing execution.
While Wedbush maintained a more cautious valuation stance and Jefferies pointed to competitive dynamics that remain in flux, both firms agreed that AI-driven infrastructure demand is providing a more supportive near-term backdrop for the company than previously anticipated.