Key Moments
- Intel shares rose 84% in 2025, outpacing the semiconductor index’s 42% gain.
- Broker estimates point to more than 30% year-over-year growth in Intel’s data center business to $4.43 billion for the December quarter.
- However, Intel’s adjusted gross margin for the December quarter is expected to fall about 6 percentage points to 36.5%.
Investors Pin Hopes on Leadership, Capital Inflows, and AI Demand
Intel shareholders enter the latest reporting period with strong confidence. They believe CEO Lip-Bu Tan’s turnaround plan is gaining traction, especially in data centers.
Tan’s high-profile investments last year revived interest in Intel stock. The shares had slumped in 2024 after strategic missteps and an AI roadmap delay that led to major layoffs.
In 2025, Intel’s share price surged 84%, beating the semiconductor index’s 42% rise.
Additionally, Intel’s balance sheet strengthened with a $5 billion investment from Nvidia and $2 billion from SoftBank. The U.S. government also holds an equity stake. These commitments give Tan more flexibility to reshape Intel’s manufacturing and AI strategy.
Tan also streamlined Intel’s production operations and reduced management layers. These moves aim to improve speed and efficiency.
“It’s the most optimistic people have felt about the company in a long time,” said Ryuta Makino, an analyst at Gabelli Funds.
“That’s the big bull case — we may see a double-digit server CPU price hike in 2026,” he added.
Rising Expectations and Data Center Momentum
At least 10 brokerages raised their price targets or ratings on Intel over the past two months. This shows Wall Street’s outlook has improved.
For the December quarter, analysts expect data center revenue of $4.43 billion. That would mark more than 30% growth year over year, based on LSEG data.
Investors link the growth to heavy spending by large tech companies on advanced data centers. These centers use Intel’s server CPUs alongside GPUs from firms like Nvidia.
Meanwhile, PC sales are expected to rise 2.5% to $8.21 billion.
| Business Segment / Metric | Expected Performance | Period Referenced |
|---|---|---|
| Data center revenue | +30% to $4.43 billion | Quarter ended December |
| PC revenue | +2.5% to $8.21 billion | Quarter ended December |
| Adjusted gross margin | -6 points to 36.5% | Quarter ended December |
| Intel stock performance | +84% | 2025 |
| Semiconductor index | +42% | 2025 |
PC Headwinds Persist Despite Product Refresh
Intel continues to lose ground in the PC market to AMD and Arm. In addition, global memory shortages have pushed up prices, which raises laptop costs.
UBS analysts say PC demand may weaken because memory accounts for 25% to 30% of PC costs. As a result, they now expect global PC shipments to fall 4% in 2026.
Intel is trying to offset these pressures with a refreshed product lineup. It has started shipping “Panther Lake” PC processors. These chips use Intel’s new 18A manufacturing node.
Foundry Ambitions and Yield Challenges
Intel has long been its own biggest customer for manufacturing. Now, investors want to see if it can attract outside foundry clients.
Some analysts, like Melius Research, say Tan has strong support from industry leaders, including Trump, Lutnick, and Nvidia’s Jensen Huang.
Reuters reported that Nvidia and Broadcom ran manufacturing trials with Intel. However, only a small portion of chips made on the 18A process meet quality standards for shipping.
Intel says yields are improving each month. Still, yield issues have hurt profitability.
As a result, Intel’s adjusted gross margin for the December quarter is expected to fall about 6 percentage points to 36.5%.
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