The AI Boom Has a New Chip Shortage. Intel Is Ready.

For the last two years, the AI story has been all about GPUs. But a quieter shortage is now building around an older, more overlooked chip, the CPU. Earlier this year, Amazon (AMZN) Web Services reportedly told its engineers to conserve CPU cycles as wait times for server capacity surged. The driver behind it is the rise of agentic AI. These are systems that work on their own, create smaller sub-agents, and use outside tools to complete tasks. The reason ties back to how these agents run. While the heavy AI thinking still happens on GPUs, the surrounding work leans on CPUs. This includes deciding the tool to use, running the code, and processing the results. AMD (AMD) says seven of the eight stages in a typical agentic pipeline run on the CPU. And because one agent can trigger hundreds or thousands more, that CPU work adds up quickly. 

Rising Demand, Right as Intel Turns a Corner

The crunch is already showing up across the market. Intel (INTC) has reportedly sold out of its server CPUs through the end of the year. AMD has doubled its server CPU forecast. ARM (ARM), Qualcomm (QCOM), and Nvidia (NVDA) have also released new chips built for agentic AI. For Intel, the timing could hardly be better. The company is in the middle of a turnaround, and a surge in CPU demand is precisely the tailwind it needs. As I covered recently, Intel has also found a rare edge over TSMC (TSM) in chip packaging, another corner of the AI market suddenly moving its way. The recent numbers back that up. In its latest quarter, Intel posted its strongest revenue growth in over 15 years, with revenue up 25%. Its Data Center and AI segment grew 59%. The company also launched Xeon 6+, its first server chip built on the new 18A process, where production yields have been improving ahead of expectations. The CPU surge is a second opening arriving at the same time. Management pointed to AI-driven compute demand strengthening and said that server supply remains very tight. 

Intel still has plenty to prove, especially in turning its foundry unit profitable. But two things matter most from here: whether Intel attacks this opening aggressively and whether it keeps the government’s backing while it does. Both seem to be going their way. It’s moving fast on new server chips, and the US government has held a stake of nearly 10% in Intel since last year. This makes it the company’s largest shareholder and gives Washington a direct interest in seeing the turnaround succeed. If that support holds, a surge in CPU demand could be the tailwind that finally makes the turnaround work. 

About Intel Corporation Stock

Intel Corporation operates as a manufacturer, designer, developer, marketer, and seller of semiconductor chips. The company’s operations are divided into three business segments: DCAI, CCG, and Intel Foundry. Its products are used in data centers, networking, AI, PCs, and other computing systems. Intel was founded in 1968 and is based in Santa Clara, California. 

INTC stock posted exceptional returns over the past year, surging roughly 311%. The biggest catalyst came in April, when the stock jumped nearly 88% after the company reported stronger-than-expected first-quarter results. In comparison, the iShares Semiconductor ETF (SOXX) gained around 112% during the same time frame. This highlights growing investor confidence in the stock as it significantly outperformed the broader semiconductor sector.

Intel Corporation Delivers Strong Earnings 

The company posted its second-quarter fiscal 2026 results on July 23. During the quarter, it generated $16.1 billion in revenue. The Client Computing Group delivered revenue of $8.9 billion, up 15% from the previous quarter, while the Data Center and AI business grew 24% sequentially and 59% year-over-year (YoY) to $6.3 billion. Intel Foundry reported revenue of $5.8 billion, up 6% from the previous quarter, including $293 million from external foundry customers. Although the foundry segment remained unprofitable, its operating loss narrowed from the previous quarter. On the earnings front, non-GAAP earnings came in at $0.42 per share. 

Going forward, Intel guided for third quarter revenue between $15.8 billion and $16.8 billion. The company expects to deliver a non-GAAP gross margin of 42% along with earnings of $0.38 per share at the midpoint of its forecast. It also reaffirmed its full-year non-GAAP operating expense outlook of roughly $16.5 billion while raising its capital spending forecast to more than $20 billion. 

What Do Analysts Expect for INTC Stock?

Analyst sentiment toward INTC stock has recently remained neutral, with most firms leaving their ratings and price targets unchanged. This suggests that analysts do not expect any major near-term catalyst to lift the share price significantly. On Aug. 12, Bank of America Securities maintained a “Buy” rating for INTC with a price target of $145. A few weeks earlier, both Stifel Nicolaus and Truist Financial maintained their “Hold” ratings with price targets of $110 and $108, respectively.

According to 45 Wall Street analysts covering INTC stock, the consensus rating is “Moderate Buy.” The mean price target of $113.87 implies a further 19% upside from the current share price. In addition, the highest price target of $200 suggests that the stock could nearly double from current levels.