As Elon Musk Backs the Intel 14A Tech for His Terafab, Should You Buy INTC Stock?

Intel (INTC) is shaping up to be one of the most exciting comebacks ever seen in the market. News of Elon Musk saying Tesla (TSLA) and SpaceX are set to use Intel's next generation 14A process for Terafab — an ambitious AI semiconductor manufacturing program — recently sent shares of INTC stock higher.

This is a huge win for the bulls, as the case for INTC stock had changed completely from "legacy CPU recovery" to a much more ambitious goal surround whether or not Intel's foundry business could once again become strategically significant. First-quarter 2026 results further cemented investors' belief that Intel is well on track to do so with the help of solid CPU demand in the age of artificial intelligecne (AI).

About Intel Stock

Intel is a Santa Clara, California-based chipmaker focused on CPUs, data-center processors, semiconductor manufacturing, and foundry services. With a current market capitalization of $424 billion, Intel has reclaimed mega-cap status following an impressive comeback over the past few months.

Shares of INTC stock are currently trading near $84 per share, recently seeing a gain of 3% on April 27. Intel has also seen a gain of 26% over the past five days, with shares trading just 3% off the 52-week high of $87.10 per share. To put things in perspective, Intel stock isn't priced as a simple CPU recovery play, but as an advanced foundry company capable of making CPU demand skyrocket in the AI era.

That is not to say the valuation is low right now. Trading at a price-to-sales (P/S) ratio of 7.8 times, a price-to-book of 3.3 times, and a forward price-to-earnings (P/E) ratio of 988 times, Intel is anything but undervalued.

Intel Reports Stronger Than Expected Earnings

Intel's Q1 2026 revenue reached $13.6 billion, marking a 7% year-over-year (YOY) increase. The firm posted losses on a GAAP basis, reporting a loss per share of $0.73. However, on a non-GAAP basis, EPS reached $0.29 compared to just $0.13 last year. Non-GAAP net income grew 156% YOY to $1.5 billion.

Management's guidance suggests that Q2 2026 revenue will fall between $13.8 billion and $14.8 billion, with GAAP EPS at $0.08 and non-GAAP EPS at $0.20. Intel produced $1.1 billion in operating cash flow during the first quarter.

While the company's Q1 financial performance was nothing out of the ordinary, Intel posted record financial results since 2022 on the back of better-than-expected CPU demand in the era of AI.

In the report, CEO Lip-Bu Tan mentioned that AI is moving away from foundation models to inference and agentic workloads, driving demand for Intel's CPUs, wafer technology, and advanced packaging. That makes Musk's recent Terafab news of even more importance, as it provides outside validation of Intel's ability to provide advanced manufacturing. Terafab, a major Tesla and SpaceX project, will use Intel 14A for its chip manufacture, adding another external customer and confirming Intel's foundry capabilities to outside investors.

What Do Analysts Expect for Intel Stock?

The majority of analysts expect a lower price tag with a consensus “Hold” rating for Intel. The high price target for Intel is $111 per share, the mean target is $74.54 per share, and the low target is $36. Currently trading at $84.52 per share, the mean target suggests INTC stock has about 12% potential downside risk. Meanwhile, the high target of $111 implies potential upside of 31% from here.