Why Is Everyone Talking About Intel Stock Right Now? | INTC Stock Analysis

Añadido: 2026-05-05

[00:00:00]Everyone is talking about Intel stock right now as the price is soaring by over 20% on the day after the company reported quarterly financial results. I thought specifically the management team did a great job explaining why the business is booming and what's causing the business so much success. So, let me share with you precisely what the management team said that's causing investors to get excited and talk about Intel.

[00:00:25]I want to thank The Motley Fool for sponsoring this video. Visit fool.com/parquev for the 10 best stocks to buy now. So, I think this statement here accurately reflects the latest development in the AI industry. So, for the last few years, the story around high-performance computing was almost exclusively about GPU and other accelerators, right? This is the product that Nvidia sells. This is the product that's driven Nvidia to become a market cap company over $5 trillion earlier this morning.

[00:00:58]The recent months, however, have changed and what we've what Intel has seen is that the CPU is reinserting itself as the indispensable foundation of the AI era.

[00:01:11]So, the GPU was in and still is in really high demand for these data centers, but in recent months, the CPU is becoming increasingly important and the CEO gave a interesting ratio that formerly it was about 8:1 ratio between GPUs and CPUs that go into a data center and more recently, that's become a 4:1 ratio. So, nearly double the amount of CPUs per GPU that's going into the data centers in recent months because of the change in what AI is being used for.

[00:01:47]Formerly, AI was mostly being used in development, in training these models and more recently, there's been a lot more inferencing, a lot more use of AI especially in uh the agentic modes and in this mode where it the agentic action is what's primarily driving the use case, that positions the CPU as a more important component in the overall AI ecosystem and that's driving Intel's most recent success. So, customers are deploying server CPUs alongside accelerators in the ratio that's moving back towards CPU and I talked about that ratio improving uh in Intel's favor. So, the company's branded products are doing well and accelerating, but still remaining to improve is the company's foundry business where it manufactures semiconductors on behalf of third-party customers, their own branded, their own designed products and Intel just manufactures them. That part of its business still not doing very well.

[00:02:55]They continue to make steady steady progress though in their advanced packaging technologies including additional growth in customer backlog during the quarter. Working on their next generation technologies, Intel 14A, maturity, yield, and performance are outpacing Intel 18A at a similar point in time. So, this latest technology is making better progress than their previous technology did at similar points in time.

[00:03:22]They expect to see earlier design commitments emerge beginning in the second half of this year and expanding into the first half of 2027.

[00:03:31]And that's something that would really get investors excited. Intel's foundry business is the one that's lagging behind the rest of its business right now. The segment generated nearly $2.5 billion in losses just in the most recent quarter.

[00:03:45]So, if that segment can expand, add new customers, Tesla's famously considering partnering with Intel for its Terafab manufacturing facility and that would be the final driver that will bring Intel's business up and firing on all cylinders.

[00:04:02]So, they talk about that recently announced partnership with SpaceX, XAI, and Tesla to support their Terafact facility. It was short on details, but it's great that a big customer like Tesla, SpaceX, and XAI are considering Intel for their manufacturing needs. And beyond the qualitative discussion that the management team provided, they also gave us tangible evidence of this success. First quarter revenue at 13.6 billion was a full $1.4 billion above the midpoint of their guidance.

[00:04:38]And Q1 revenue would have been meaningfully higher, but they didn't have enough supply. Demand continues to outpace even their growing supply. And so, that's the magic words investors love to hear when demand outpaces supply. And this situation is beneficial for so many reasons. It allows a company to utilize a greater percentage of its manufacturing capacity, so there's little wasted availability of supply and it also allows the company to exercise pricing power and receive full pricing for their products because if one customer tries to negotiate on price and tries to ask for a discount, Intel can just say, "Look, there's somebody waiting in line. If you're going to try to haggle with us, we'll just allocate our supply to someone else and you won't get anything." And so, customers are just like, "Fine, fine, fine. We'll pay what you ask. We won't negotiate." And that's the situation that happens when you have demand that exceeds supply.

[00:05:37]It's a great position to be in from a business perspective. It's rare, but it's a great position to be in. And so, a lot of good that came out of Intel's recently completed quarter. Investors were waiting for this for several years for the company to start to reap the benefits of the tens of billions of dollars they've invested in the business over previous years. So, congratulations to all you Intel stock investors.

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