Intel has had a solid start to 2026, as investors grow more confident that the chipmaker’s long-running turnaround is finally gaining traction. Shares have surged in recent weeks, pushing the stock to levels not seen in nearly two years and marking a stark reversal from the selloff that defined much of 2024. The rally reflects a shift in perception on Wall Street, with Intel increasingly viewed not just as a legacy CPU maker, but as a potential beneficiary of the global push to diversify advanced chip manufacturing away from Asia.
Foundry Progress Reshapes the Narrative
At the heart of Intel’s resurgence is renewed optimism around its foundry strategy, which aims to manufacture chips for outside customers using its own advanced processes. Investors and analysts have pointed to improving yields, progress on Intel’s next-generation manufacturing nodes, and early interest from potential customers as signs the effort may finally be credible.
While Intel has yet to announce a marquee foundry client, recent analyst upgrades suggest confidence is growing that the company can secure meaningful contracts. Some see a window of opportunity as competitors face capacity constraints and as customers seek alternatives to existing dominant suppliers.
A Back Door Into the AI Trade
Intel’s comeback has also pulled it back into the AI investment narrative — an area where it was widely seen as falling behind rivals during the early stages of the AI boom. While the company does not compete directly with leading GPU makers in high-end AI accelerators, it remains essential to the broader ecosystem.
Demand for CPUs used in data centers continues to rise alongside AI workloads, and Intel’s advanced packaging capabilities are increasingly viewed as a differentiator. Analysts note that even AI-heavy systems still rely on Intel’s core products, providing a steadier revenue base than headline-grabbing accelerator chips alone.
Washington Tailwinds and Strategic Importance
Another factor supporting Intel’s stock has been its growing strategic importance to the U.S. government. As one of the few companies capable of producing advanced chips on American soil, Intel stands to benefit from ongoing efforts to strengthen domestic semiconductor manufacturing. Policy support, direct investment, and public-private partnerships have helped shore up Intel’s balance sheet and bolstered investor confidence that the company has political backing as it executes its long-term plans. Geopolitical risks surrounding Taiwan have only sharpened that focus.
Valuation Concerns Linger
Despite the renewed optimism, not everyone is convinced the rally can continue. Intel’s valuation has expanded rapidly, reaching levels that some investors argue already price in a successful foundry turnaround. Skeptics caution that execution risks remain high, particularly given the capital-intensive nature of chip manufacturing and the fierce competition for advanced-node customers. Until Intel secures major foundry contracts, questions about long-term profitability are likely to persist.
Looking Ahead
Intel’s next major test comes with its upcoming earnings report, where investors will be listening closely for updates on manufacturing progress, customer interest, and capital spending discipline. While few expect a dramatic financial turnaround overnight, any confirmation of new partnerships or accelerating demand could further reinforce the bull case. For now, Intel’s stock reflects a market willing to bet that years of heavy investment and strategic repositioning are beginning to pay off — even as the margin for disappointment narrows with every incremental gain.