Intel shares surge as investors warm to CEO Lip-Bu Tan’s turnaround strategy

Intel shareholders are feeling more hopeful about the company than they have in several quarters, believing that CEO Lip-Bu Tan’s promised turnaround is starting to work and that growing data center construction is driving strong sales for the company’s traditional server chips.

Several big-name investments arranged by Tan last year have renewed investor attention to Intel stock, which had fallen sharply in 2024 after years of poor management decisions. Those missteps included a failed AI product plan that resulted in major competitive setbacks and thousands of employees losing their jobs.

Stock surges as confidence returns

Intel’s stock jumped 84% in 2025, doing much better than the main semiconductor index’s 42% increase.

The company plans to release its fourth-quarter results after markets close on Thursday.

Major financial backing has strengthened Intel’s position. Nvidia invested $5 billion in the company, while SoftBank put in $2 billion. The U.S. government also took a stake in Intel. These moves have improved Intel’s balance sheet and given Tan room to start changing the company’s manufacturing and AI plans.

Tan has also remade the company’s chipmaking operations and reduced what he described as an overly large management structure.

“It’s the most optimistic, I think, people have felt about the company in a long time; the near-term dynamics are set up very well,” said Ryuta Makino, an analyst at Intel investor Gabelli Funds.

“That’s really the big Intel bull case here – I think there will be at least a double-digit server CPU (central processing unit) price hike in 2026.”

At least 10 brokerages have increased their price targets or ratings for Intel in the past two months, showing higher expectations for the company.

Intel will likely report more than a 30% jump in its data center business to $4.43 billion for the quarter that ended in December, based on data compiled by LSEG.

The increase could come from large technology companies expanding advanced data centers that need Intel’s traditional server chips and CPUs, along with graphics processors made by companies like Nvidia.

Sales in Intel’s personal computer division likely grew 2.5% to $8.21 billion.

PC market challenges persist despite new products

Intel has been steadily losing market share in the PC market to competitor AMD and chip blueprint designer Arm. The company may now also deal with weaker PC demand because a worldwide shortage of memory chips has pushed up memory chip prices and made laptops more costly.

“While we remain bullish on data center demand, we believe PC demand may moderate from increasing memory pricing, given memory accounts for 25% to 30% of PC bill of materials,” UBS analysts said in a note earlier this month.

The brokerage expects a drop of 4% in worldwide 2026 PC shipments, compared with the over 3% growth it predicted earlier.

Intel’s updated product lineup may help reduce some losses.

The company has begun shipping its new “Panther Lake” PC chips – the first product made using Intel’s critical 18A manufacturing technology. Its previous generation of PC chips were mostly made by chip contractor TSMC.

Intel has long been its own biggest manufacturing customer, but with its growing political goodwill, observers are hoping for new foundry clients.

“We really like Lip-Bu Tan, but more importantly, more powerful people like President Trump, Secretary Lutnick, (Nvidia CEO) Jensen Huang, and even (AMD CEO) Lisa Su like him even more as a business partner,” Melius Research analysts said in a note.

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