Intel Stock Rockets Overnight On Blowout Q1: Analyst Says ‘We’re Overthinking’ As Valuation Gap With NVDA, AMD Widens

• INTC shares jumped 22% in the overnight session following its Q1 report on Thursday, with AMD and ARM stocks rising in tandem.
• Data center builders are lapping up CPUs and other data center hardware from Intel.
• Analysts believe INTC could remain elevated in the near- to medium term as its foundry business ramps up. 

Intel Corp. surprised investors Thursday with blowout first-quarter results and second-quarter guidance, sending its stock soaring after the closing bell and raising Wall Street’s optimism about the chip sector.

Still, some appeared unsure whether Intel’s gains – the stock up over 80% already in 2026 – would be sustained, and suggested looking into peers Advanced Micro Devices and Arm Holdings as potential near-term gainers.

Besides turnaround-related improvements, Intel’s report signaled that CPUs were being lapped in large numbers amid the rapid buildup of data centers, marking a shift as GPUs are the server of choice for AI-related workloads.

Notably, shares of peer CPU sellers AMD and ARM shot up 7% and 5% higher in overnight trading, respectively. INTC was up 22%. “Intel can still be bought, but so can AMD and ARM the latter being the horse to be on now,” CNBC’s Jim Cramer said on X.

CPUs, which mainly power personal computers and consumer devices, handle a wide range of tasks with a few powerful cores, while GPUs process many parallel tasks simultaneously using thousands of smaller cores.

What Drove Intel’s Q1 Results?

Intel’s first quarter sales increased 7% to $13.6 billion and adjusted profit more than doubled to $0.29 per share. Its Q2 sales forecast of $13.8-$14.8 billion was also above expectations, while the $0.20 EPS view was double what analysts had penciled in.

“The next wave of AI will bring intelligence closer to the end user, moving from foundational models to inference to agentic. This shift is significantly increasing the need for Intel’s CPUs and wafer and advanced packaging offerings,” Intel CEO Lip-Bu Tan said in the company’s earnings release.

Intel also displayed a noticeable uptick in its foundry business – long a sore point – with sales rising 16%, the best on record since the company started reporting the segment’s revenue.
 

Is INTC Really A Buy?

With the pre-results share rally sending Intel’s 12-month forward price-to-equity upwards of 118 times – versus the chips sector's 24-times average – the debate is whether it is the right time to invest.
 

“We're overthinking this,” Deepwater Asset Management managing partner Gene Munster said in an interview with CNBC. “We're looking at what the multiple is. We can look at the revenue multiple, which trades at about half of where TSM and Nvidia are. So there's a little bit of valuation justification there.”

Highlighting that Intel was “on the ropes” as early as last year, Muster said Intel’s report confirmed that AI-linked chips demand was robust and would continue to power the broader sector.

“What's going on here is this is a rising tide,” Munster said. “Now I'm not saying we're going to buy the stock tomorrow… but what is going on here is, this is testimony to everything that we have been hearing. We are still very early in AI.” 

“It's a testimony to the concept that Elon's [Musk] been talking about, which is that chips are a big bottleneck. This advanced packaging piece is a major headache for how we're going to basically fuel the AI brain in the next five years. And Intel, whether they still have dysfunctionality, they're all with all their deficiencies.”

Others argued that Intel would rally especially when its foundry business ramps up. “Intel now at all time highs before Foundry is even meaningfully contributing. Intel has a bright future and it’s still very early,” The Futurum Group founder Daniel Newman said on X.

INTC was the top trending ticker on Stocktwits in the late hours on Thursday, with retail sentiment shifting to ‘extremely bullish’ from ‘bullish’ the previous day. Message volume rose nearly 400% in the last 24 hours. 

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