Among the semiconductor stocks that have performed robustly in 2026, Intel (INTC) undoubtedly stands out as one of the most eye-catching gainers. As of recently, the company’s share price has rallied approximately 180% year-to-date, far outpacing the 67% gain of the Philadelphia Semiconductor Index over the same period. With the chip giant scheduled to release its second-quarter results after the market close on July 23, the market is focusing on whether the stock, after its massive surge, still offers buying value ahead of the earnings report.
Although Intel currently trades at a trailing price-to-earnings ratio of 904x (based on the past twelve months’ earnings), significantly higher than the iShares Semiconductor ETF’s valuation of roughly 74x, its forward P/E of 137x is substantially below historical levels, implying that the market has already priced in an imminent profit explosion. According to company guidance, non-GAAP earnings per share for the second quarter are expected to be $0.20, with revenue reaching $14.3 billion, representing a year-over-year increase of nearly 11%; this compares to a loss per share of $0.10 in the same period last year. Analysts generally forecast that Intel’s full-year 2026 EPS will surge 161% to $1.09, and they project an accelerated growth rate of more than 40% over the subsequent two years.
The core driver behind this stock rally has been the explosive growth in demand for data center server CPUs. As AI workloads transition from training to inference and agentic applications, the strategic importance of CPUs is being reassessed. In server racks handling agentic AI tasks, each GPU requires one CPU, whereas traditional training servers require only one CPU for every four to eight GPUs. This structural shift is driving up server CPU prices and creating supply shortages.
Intel has confirmed price increases on select consumer and server CPUs, ranging from $30 to $50 (consumer-level) to hundreds or even thousands of dollars (data center-level). For instance, the recommended customer price for the Xeon 6980P has been raised to $13,955. Investment bank Wedbush believes that, given persistent supply tightness, Intel still has room for further price hikes without dampening demand. Market research firm TrendForce predicts that the current ratio of AI data center CPUs to GPUs, about 1:4 to 1:8, will evolve to 1:1 to 1:2 in the agentic era. Creative Strategies estimates that the data center CPU market size will grow from $25 billion in 2026 to between $60 billion and $100 billion by 2030.
This round of price increases validates a market dynamic where demand outpaces supply, rather than merely reflecting cost pass-through. However, actual transaction prices for data center hardware often differ from public list prices due to purchasing scale and strategic relationships, so the real impact of these price hikes on Intel’s average selling prices for this quarter and the full year remains to be revealed in the earnings report. Despite a recent pullback in the stock price, Intel is regaining investor favor, driven by progress in its foundry business and CPU demand catalysts. For growth-oriented investors, the upcoming earnings growth rate carries the potential to significantly exceed expectations, which could add fresh momentum to a stock that has already seen a massive run-up this year.
