Intel’s 37% Rally Raises the Bar for Its Turnaround

A hit AI app helped turn Intel into one of the market’s hottest chip trades. The shares climbed about 37.5% in a month, leaving investors to weigh fresh demand hopes against the price of a turnaround that still has a long way to go.

Meta’s Muse personal AI agent helped spark a broad CPU rally on September 21. Investors are betting that software agents running multistep tasks will need more processors to coordinate work alongside AI accelerators. That is a plausible demand story, not proof of new Intel orders. NVIDIA’s selection of Intel’s Xeon 6 as the host CPU in its DGX Rubin NVL8 systems offers a more concrete customer win, though it does not settle the larger question of how much business Intel can capture.

The operating results have improved. Intel reported second-quarter revenue of $16.1 billion, up 25% from a year earlier, while its Data Center and AI division grew 59% to $6.3 billion. Adjusted earnings were 42 cents a share, and the company forecast third-quarter revenue of $15.8 billion to $16.8 billion. Those figures give the rally a business backdrop, not just an AI narrative.

But the foundry remains the harder test. Intel Foundry posted a $2.1 billion operating loss in the second quarter, and only $293 million of its $5.8 billion in segment revenue came from external customers, according to the company’s filing. Most foundry activity still supports Intel’s own products. Turning that manufacturing operation into a business with substantial outside customers will take time and capital.

One detail worth correcting: an earlier account said CEO Lip-Bu Tan sold shares into the rally. His August Form 4 instead disclosed a purchase of 105,263 shares at $95 through a family trust.

For existing holders, a sharp gain can be a reason to check whether Intel has grown too large in a portfolio, rather than a signal to sell everything. New buyers face a tougher entry: staggering purchases or waiting for the next earnings report may reduce the risk of betting all at once on a rally that has outrun the factory’s proof. Watch revenue, foundry losses and named outside customers. That is where the comeback becomes measurable.