Why Intel Stock Surged 12% In Two Days

Intel stock (NASDAQ:INTC) fared well over the last two days, rising by about 12% in total over Monday and Tuesday. There are a couple of factors benefiting Intel stock of late.

More AI Semi Manufacturing In U.S.

Intel has invested heavily in its foundry business in the U.S. over the last few years. While the unit has struggled, losing nearly $13 billion last year, there are signs that things could pick up. U.S. Vice President J.D. Vance indicated at a conference that the Trump Administration wants AI chips to be manufactured domestically, with both design and production taking place in the U.S. to safeguard American AI technology and intellectual property. There’s a possibility that we could see considerable regulatory support aimed at boosting domestic chip production. For example, the administration could impose tariffs that increase the cost for foreign fabrication companies to produce and export chips to the U.S. A stronger emphasis on domestic production, whether via tariffs or other policies, could drive more business to Intel’s foundry unit as companies look to U.S. suppliers to avoid potential duties. See how Trump and New Manufacturing Processes Help Intel Stock. Customers such as Microsoft and Amazon have already contracted Intel to fabricate some of their custom chips, including AI accelerators, and this trend could pick up. Intel’s key competitors such as AMD and Nvidia are fabless and rely on overseas foundries such as Taiwan’s TSMC for production at the moment.  There is a possibility that we could see them also divert some production Intel’s way, as the company deploys more advanced fabrication processes such as its 18A process. Separately, if you want upside with a smoother ride than an individual stock, consider the High Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.

Positive Reviews For New Chips

Separately, Intel’s latest processor, the Intel Core Ultra 9 275HX, has received positive reviews. Preliminary benchmarks from PassMark show that Intel’s new Arrow Lake-based Core Ultra 9 chip outperforms AMD’s competing Ryzen 9 processor by about 7% in CPU benchmarks. Additionally, it is 34% faster than the previous generation i9-14900HX, with single-thread performance improving by 9%. Unlike Intel’s AI-focused Lunar Lake chips, these new processors prioritize raw performance for demanding productivity and creative workloads. This launch comes at a relatively opportune time. Over the past two years or so, companies have likely under-invested in traditional CPU-based computing while aggressively securing GPUs, driven by FOMO, or the “fear of missing out” on securing the compute capacity needed for AI deployment. As CPU-related spending potentially rebounds, Intel could be well-positioned to benefit after years of market share losses in both the client and server markets.

Intel’s Stock Performance 

The decrease in INTC stock over the last 4-year period has been far from consistent, with annual returns being considerably more volatile than the S&P 500. Returns for the stock were 6% in 2021, -47% in 2022, 95% in 2023, and -60% in 2024. The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, is considerably less volatile. And it has comfortably outperformed the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics. Given the current uncertain macroeconomic environment around rate cuts and multiple wars, could INTC face a similar situation as it did in 2021, 2022, and 2024 and underperform the S&P over the next 12 months – or will it see a recovery?

Intel stock trades at about $21 per share currently or just a little over 20x consensus 2025 earnings, which is reasonable in our view. We value Intel stock at about $27 per share, well ahead of the current market price. Despite the company’s many issues over the last few years, we believe that Intel’s foundry investments, stronger CPUs, and a potential cooling off of AI related spending could benefit Intel stock. See how China’s Breakthrough AI Model DeepSeek actually benefits Intel Stock. See our analysis of Intel’s valuation for a closer look at what’s driving our price estimate for Intel. Also see our Intel upside analysis on How Intel Stock Can Surge 3x To $60.  On the other hand, see our counter scenario which explores how Intel Stock Could Dive To $10.

[1] Returns as of 2/12/2025
[2] Cumulative total returns since the end of 2016

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