Following an 84% gain in 2025, Intel (INTC 2.34%) has so far kept the rally going in 2026. Shares of Intel are up another 27% through the first few weeks of the year as investors buy into the turnaround story.
Intel's earnings are depressed as the company invests heavily in manufacturing and works to return its CPU businesses to sustainable growth, so valuing the stock based on the P/E ratio doesn't make much sense. However, multiple catalysts could drive Intel's bottom line and stock price much higher in the years ahead.
Image source: Intel.
1. Panther Lake marks the beginning of Intel's PC comeback
Intel unveiled its Panther Lake family of PC CPUs at CES 2026. Panther Lake is the first high-volume chip to use the Intel 18A process, which represents a significant leap in performance and efficiency from Intel's earlier processes.
Third-party reviews for Panther Lake-based laptops will be available later this month when those systems start shipping, but so far, Intel appears to have a winner on its hands. "Intel doesn't suck anymore," reads part of a headline from PCWorld that sums up the improvements Intel has made with Panther Lake. Panther Lake combines exceptional battery life, a major boost in performance, and a huge leap in graphics capabilities. It may even find its way into handheld gaming PCs.
Following Panther Lake will be Nova Lake, a line of PC CPUs destined for both desktop and laptop systems. There may be an earlier refresh of Arrow , Intel's last-gen CPU family, but that won't bring much new to the table. Nova Lake is also expected to use the Intel 18A process. The wildcard is Serpent Lake, the rumored codename for the PC CPU developed with Nvidia as part of a deal announced last year. Little is known about this chip, and it could take multiple years before it hits the market.
While there's some uncertainty in Intel's roadmap, the company has a strong lineup for 2026 with Panther Lake and 2027 with Nova Lake. Intel has been shedding market share to AMD for years, and 2026 could be the year Intel puts its foot down and stops the bleeding.
2. Intel's server CPUs are selling out
Demand for servers is soaring as mega-tech giants aggressively build AI data centers. While GPUs and memory chips were already in short supply, server CPUs are now becoming scarce as well. Intel management noted at a recent conference that even after shifting manufacturing capacity from PC to server chips, the company won't be able to fully meet demand in the first part of 2026.
This situation was echoed by a KeyBanc analyst who recently upgraded the stock partly because Intel was almost entirely sold out of server CPUs for 2026. Granite Rapids and Sierra Forest are Intel's most recent server CPU families, manufactured on its own Intel 3 process, while older generations use the aging Intel 7 process. Next-gen server CPUs will use Intel 18A, which is currently ramping to support the Panther Lake launch.
Intel has also been losing market share to AMD in the server CPU market, but its product portfolio has improved significantly over the past few years. With strong demand and major performance and efficiency improvements likely this year and next as Intel launches new chips, the company should see solid revenue and profit growth in its data center segment.
3. The long-term foundry opportunity
Intel 18A appears to have mostly closed the performance and efficiency gap with foundry leader TSMC. As Intel improves yields, boosts capacity, and prepares to launch its next-generation Intel 14A process, the company has an opportunity to win business from external customers struggling to secure capacity amid the AI boom.
Right now, demand for advanced semiconductor manufacturing and packaging is outstripping supply. TSMC tends to be conservative when it comes to ramping up capital spending, and it can take years to bring a new fab to volume production. For companies designing their own chips, AI or otherwise, there's a strong incentive to search out alternative suppliers.
Samsung is an option, but the company has reportedly been struggling with yields for its latest processes. The Intel 18A process has also faced challenges, but the company has said yields are now improving at an industry-standard rate. Intel could pick up business from chip designers who need more capacity than what TSMC can provide. Apple is reportedly eyeing a version of the Intel 18A process for some chips.
It will take time for Intel's foundry business to start generating meaningful revenue from external customers, but given the shortage of advanced chip manufacturing capacity, the company is well-positioned to secure orders and prove to investors that its foundry strategy can work.
NASDAQ: INTC
Key Data Points
It's not too late to buy Intel stock
While shares of Intel have surged since the start of 2025, the company's market capitalization is still well below its all-time high, and even below multi-year highs reached in early 2020. At the same time, Intel's total addressable market today is dramatically larger, thanks to its foundry business and booming demand for chips used in AI data centers.
Intel stock has shot up quickly, and volatility will likely be par for the course. But in the long run, Intel looks like a great investment as the company stages a comeback.
