Intel (INTC.O) shares climbed nearly 8% on Friday, reaching their highest level in 18 months, after the chipmaker delivered better-than-expected quarterly profits and signaled progress in its ongoing recovery under CEO Lip-Bu Tan. The rally comes as investors increasingly buy into Intel’s deep restructuring and renewed financial discipline after years of market setbacks.
Once a symbol of Silicon Valley dominance, Intel endured a difficult 2024, posting its first annual loss in nearly four decades amid manufacturing delays and aggressive competition from Nvidia (NVDA.O) and AMD (AMD.O). But its latest quarter has restored confidence, thanks to massive cost cuts and fresh investments from Nvidia, Japan’s SoftBank, and even the U.S. government, which recently took a 10% equity stake in the company.
These moves have helped shore up Intel’s balance sheet, giving it breathing room to focus on long-term product development and manufacturing efficiency. Intel’s stock has now surged more than 90% in 2025, outperforming both Nvidia and AMD, and trades at a forward price-to-earnings ratio of 71.5 — more than double its closest rival.
Analysts praised Tan’s strategy of “steadying the ship” by tightening operations, cutting over 20% of the workforce, and selling a controlling stake in Altera, its programmable chip subsidiary. “It feels like a strong setup for 2026,” said Ben Bajarin, CEO of Creative Strategies.
Still, challenges remain. CFO Dave Zinsner warned that yields for Intel’s new 18A manufacturing process — key to its comeback in advanced chipmaking — will not reach “industry-acceptable levels” until 2027. Meanwhile, analysts at Bernstein cautioned against premature celebration, saying that “the fight is far from over; perhaps it’s better to call it a draw for now.”
Intel continues to face heavy competition in AI-focused chips, an area where Nvidia and AMD maintain a significant lead. Yet the company’s strong demand in data centers — particularly CPUs optimized for AI workloads — signals that its recovery is gaining traction faster than many expected.
