Get rid of the "AI laggard" label! Intel Corporation (INTC.US) skyrocketed 31% at the beginning of the year, as the market bets on the "foundry leader" making a comeback.

The significant increase in the stock price of Intel Corporation (INTC.US) at the beginning of the year indicates that investors are becoming increasingly optimistic about the chip manufacturer gaining new contract customers, which will allow it to re-enter the field of artificial intelligence. Intel Corporation seemed to have abandoned this field by 2024. Following a surge of 84% in 2025, the stock rose by 31% at the beginning of 2026, ranking as the third best performer in the S&P 500 index. The stock is currently approaching its highest level in two years, after dropping by 60% in 2024, when Intel Corporation appeared to be lagging behind competitors who were profiting from the AI trend. Kim Forrest, Chief Investment Officer of Bokeh Capital Partners and a long-term shareholder of Intel Corporation, stated, "It has come back to life. It was painful to hold it, but now it feels great." Several catalysts have fueled this optimism: improved financial prospects, new confidence reflected by recent analyst upgrades on Wall Street, speculation about new contract customers, and even enthusiasm for the possibility of the company winning in Trump's "America First" movement. Intel Corporation is set to announce its fourth-quarter financial results after market close on January 22nd, with investors closely monitoring signs of performance improvement. Analysts from firms like Citigroup and KeyBanc have recently upgraded the stock rating, with the number of buy ratings reaching a new high in over a year. Earlier this week, John Vinh of KeyBanc upgraded the rating of Intel Corporation stock to "hold," citing strong market demand, progress in contract manufacturing, and a potential agreement with Apple Inc. to use Intel Corporation chips in its computers and iPhones. Vinh wrote that manufacturing chips for AI and other purposes is a massive business, and Intel Corporation's 18A technology advancement "is enough to make us believe it's entirely possible to surpass Samsung and become the industry's second-largest contract supplier." He set a target price of $60, the highest on Wall Street, indicating a 24% increase from the closing price of $48.32 on Thursday. However, the average target price given by analysts is $40.66, which implies a 16% decrease in stock price over the next 12 months. But Wall Street may still be adjusting its strategy. For example, Citigroup Inc. upgraded the stock rating from "sell" to "neutral" in a research report on Thursday, raising the target price from $29 to $50. Analyst Atif Malik of Citigroup wrote, "We believe Intel Corporation will benefit from the tight supply of advanced packaging provided by Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, and the unique opportunity window to attract wafer contract customers with support from the U.S. government." Intel Corporation also benefits from the demand for Central Processing Unit (CPU) chips used in personal computers and data centers, in addition to the Graphics Processing Unit (GPU) chips provided by NVIDIA Corporation and other semiconductor manufacturers. One unpredictable factor that has been driving Intel Corporation's stock price up is its relationship with Trump. Last year, after Trump criticized CEO Li Wanhu, the U.S. government invested in Intel Corporation. NVIDIA Corporation and SoftBank also invested in Intel Corporation, helping it improve its balance sheet. Paul Meeks, Technology Research Director at Freedom Capital Markets, stated, "The company is seen as having good relationships with angel investors, especially in Washington power brokers, as well as with some well-known tech companies." As one of the few chip manufacturers in the U.S., Intel Corporation's position may also boost its stock price, as speculation suggests that political friction with GEO Group Inc could disrupt the operations of the most crucial chip contract factory operator, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US). Since Li Wanhu took over as CEO of Intel Corporation last year, optimism about the contract and manufacturing business has increased, but Intel Corporation has not yet secured any well-known customers. According to Forrest, Li Wanhu, with his engineering background, is an important part of Intel Corporation's transformation strategy. Forrest said, "Intel Corporation's senior management has mismanaged for decades, leading to the company's mispositioning, and has been stuck in its former glory. But what they have are excellent engineers and advanced wafer factories capable of producing products." The rise in the stock has some investors worried about a correction. Intel Corporation's stock price is currently over four times expected sales, hitting its highest level in over two decades. Meeks believes this valuation is too high. The next catalyst for Intel Corporation investors may come from next week's earnings report. Analysts' average forecast shows that Intel Corporation's revenue is expected to decline by 1% in 2025, but is expected to increase by 3% in 2026. Therefore, the key may lie in Li Wanhu and other Intel Corporation executives' outlook on future prospects. Meeks said, "No one expects them to be wildly successful. If they can confirm some latest manufacturing technology partners, that may be surprising."