Two years ago it was a "survival issue," now Intel’s stock price is at a record high—what did Chen Liwu do right?

Two years ago, Intel was faced with a “life-or-death problem”; today, the chip giant's stock price has reached new highs, and with a financial report far exceeding expectations and a record-breaking stock price surge, it has demonstrated its potential for recovery to the market.

Last Friday, Intel's share price soared as much as 28%, marking its largest single-day gain since 1987, finally closing up around 21% and breaking past the all-time high from the dot-com bubble period. The direct driver of the stock’s skyrocket was its first-quarter financial results: revenue of $13.6 billion (analyst estimate was $12.4 billion, beating by about 9.3%), adjusted EPS $0.29 (est. $0.01). Guidance for Q2 revenue midpoint is $14.3 billion, versus the expected $13.1 billion.

Three core metrics all beat expectations, and behind this is robust server CPU demand driven by the rapid proliferation of agentic AI applications.

Intel Vice President of Investor Relations John Pitzer described the results as “a strong indication of real progress at the execution level.” Seaport Research analyst Jay Goldberg pointed out that Intel is now on “the most solid footing it’s had in years.”

From a “life-or-death problem” to record highs, the core of this turnaround lies in CEO Pat Gelsinger seizing opportunities brought about by the structural shift in AI applications. The market’s next focus: whether the 14A process can deliver on its promises and if the foundry business can build a sustainable customer base.

How Did Intel Fall into an Existential Crisis?

Two years ago, Intel’s situation was far direr than the public knew. Goldberg bluntly stated that at the time, Intel’s survival was “a life-or-death issue,” and the company had “completely lost its technological direction.”

In Goldberg’s view, one of Intel’s most fatal mistakes was not introducing EUV (extreme ultraviolet lithography) equipment in time—this being the core tool for manufacturing advanced chips—like TSMC did. At that time, TSMC had already surpassed Intel in chip manufacturing and was producing chips as a foundry for Intel’s main CPU competitor, AMD.

Former Intel CEO Pat Gelsinger, during his tenure, advocated a resurgence of US manufacturing, led investment plans over $100 billion in Arizona, New Mexico, Oregon, and Ohio, and made Intel the largest beneficiary of the Biden administration's CHIPS and Science Act. However, Goldberg points out, Gelsinger failed to cut costs effectively and did not improve company culture to motivate employees, and was overly reliant on stock buybacks and other short-term methods to boost stock price, to some extent sacrificing the company’s long-term technical competitiveness.

Challenge Five Months After Taking Office: A Political Storm and Turnaround

In March 2025, Pat Gelsinger took over as Intel CEO. Five months later, political pressure suddenly struck—Trump publicly called for his immediate resignation on Truth Social.

Less than a week later, the situation reversed. Trump soon posted that he had an “extremely interesting” meeting with Gelsinger. Afterwards, the US government announced it would acquire a 10% stake in Intel, a deal investors saw as a crucial lifeline for the company.

Over a longer timeline, the reforms brought by Gelsinger since taking office have already started showing results. Intel VP of Investor Relations John Pitzer said the company's foundry capacity supply exceeded expectations and that closer collaborative mechanisms with customers have been established.

“CPU Renaissance” and Process Breakthroughs: AI Structural Changes Reshape the Market Landscape

The core logic behind Intel’s current rebound lies in the structural shift of AI application form. Evercore ISI analyst Mark Lipacis, in his report, called this the “CPU renaissance”—as AI agent tools emerge, AI systems capable of independently completing complex tasks will drastically increase demand for CPUs, reversing the CPU-GPU ratio from 1:8 to possibly 8:1.

Lipacis points out that, since Pat Gelsinger assumed office, Intel’s operating profit margin has improved by 500 basis points, and the debt situation has also improved. As a leading chip manufacturer, Intel’s strategic value is becoming increasingly prominent in the context of intensifying geopolitical tensions.

Tigress Financial Partners analyst Ivan Feinseth gave positive comments on Gelsinger’s leadership, stating that he is “exactly the kind of CEO Intel needed,” and noted that while carrying on Gelsinger’s foundry strategy, he has made substantial improvements in execution.

There are also positive signals in process technology. Intel VP of Investor Relations John Pitzer said that the company’s latest 18A process node’s cycle time and yield are both better than expected, and customer negotiations for the next-generation 14A process node are “progressing very smoothly.”

Worth noting, Tesla CEO Elon Musk stated during this week’s earnings call that the company’s Terafab chip manufacturing project will use Intel’s 14A process, providing further endorsement for the commercial prospects of this node. Pitzer noted that Musk and Gelsinger share similar views on driving chip innovation and addressing AI-driven supply-demand shortfalls.

After Intel Tops Out, What’s the Next Test?

Although Intel’s recent performance has excited the market, analysts remain cautious about its long-term prospects. Goldberg noted in a research report that Intel is now “fundamentally out of medium-term existential danger,” but the viability of its foundry business is still unproven. Whether it can attract enough external customers will be a key variable in determining if Intel can return to the forefront of chip manufacturing.

Intel’s story is far from over. While the record-high share price boosts confidence, the market’s final verdict will depend on whether the 14A process can deliver as promised and if the foundry business can truly establish a sustainable customer base.