Key Takeaways
- Intel shares rallied approximately 11% on Monday, topping S&P 500 gainers following a 13.5% decline the previous week
- Unconfirmed reports indicate Google could purchase 3 million AI chips from Intel by 2028
- Speculation suggests Nvidia and Tesla are considering Intel for chip production partnerships
- Morgan Stanley points to robust server CPU demand and expectations for beat-and-raise performance
- Intel has surged 422% in the last year; analyst consensus sits at Hold with a $98.15 average target
Intel shares staged a dramatic comeback Monday, surging approximately 11% to roughly $110 following a painful 13.5% decline last week during a session that wiped out $1 trillion in semiconductor market value.
The sharp rebound positioned Intel as the day’s top performer on the S&P 500. While the broader market climbed 0.8% and the Nasdaq advanced 1.4%, Intel’s gains significantly outpaced both benchmarks.
What triggered the rally? A new report from The Information claiming that Alphabet’s Google has potentially ordered Intel to produce 3 million tensor processing units — specialized TPU AI chips — for delivery in 2028. The alleged order remains unverified, with Google, Nvidia, and Intel all declining to provide confirmation or commentary.
That uncertainty didn’t deter market participants from bidding up shares.
The speculation extended beyond Google. According to Street Insider, Nvidia is exploring the possibility of using Intel as a contract manufacturer to produce a new processor architecture that integrates four Nvidia GPUs into a unified chip. Additionally, Tesla has reportedly expressed interest in partnering with Intel or potentially licensing its cutting-edge 14A manufacturing technology for use at a planned facility called Terafab.
Three potential high-profile clients. All unverified. All driving significant investor enthusiasm.
Strong Server CPU Momentum Provides Additional Support
Beyond speculation, tangible fundamentals are contributing to renewed confidence. Morgan Stanley’s Joseph Moore emphasized on June 1 that Intel is experiencing robust demand trends in the server CPU market.
Moore emphasized that the server product roadmap — rather than foundry contracts — represents the central narrative for Intel’s investment thesis. He highlighted Intel’s “clear ability to beat-and-raise near term given server CPU shortages.”
Intel CEO Lip-Bu Tan reinforced this outlook during last week’s Computex conference in Taiwan, revealing that corporate executives have been contacting him throughout the past month requesting additional CPU supply to satisfy demand.
Intel additionally announced a collaboration with Apple manufacturing partner Foxconn last week focused on building AI infrastructure, further expanding its manufacturing ecosystem.
Rally Details and Market Context
The semiconductor sector experienced broad-based recovery Monday. Broadcom shares climbed 2.7%, AMD increased 4%, and Nvidia added 1.6% following Friday’s historic selloff that marked the PHLX Semiconductor Index’s steepest single-session decline since 2020.
Yet Intel’s performance was exceptional even within this context. The stock has climbed 190% year-to-date in 2026 and posted a remarkable 422% gain over the trailing twelve months.
Despite this extraordinary performance, analyst sentiment remains cautious. Among 51 firms tracked by FactSet, the consensus rating remains at Hold, with an average price target of $98.15 — notably beneath current trading levels.
Valuation concerns persist. Intel currently operates at a loss and trades at over 120 times projected earnings for the following year.
Intel’s market capitalization now stands at approximately $498 billion. Monday’s trading saw shares fluctuate between $106.66 and $112.36, with average daily volume reaching about 122.9 million shares — reflecting intense market attention on the stock’s trajectory.
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