Intel reported a 7% revenue increase to $13.6 billion in its first-quarter results, exceeding Wall Street estimates by over $1 billion. The $79 stock price, up 80% year-to-date, reflects investor confidence in its AI-driven turnaround. Federal subsidies for its Arizona manufacturing expansion and surging demand for AI chips are key catalysts.

The company’s data center division, a major beneficiary of AI workload growth, saw revenue jump to $5.1 billion—a 22% year-over-year rise. Intel’s foundry business, which produces chips for external clients, grew 16% to $5.4 billion, as rivals like TSMC struggle to meet AI chip demand. CEO Lip-Bu Tan emphasized prioritizing customer needs amid supply constraints.

Government backing played a pivotal role: the $8.9 billion stake purchased by the Trump administration last year is now valued at $35 billion, underscoring Intel’s strategic importance. However, its traditional PC chip segment grew only 1% to $7.7 billion, hampered by falling memory prices. Analysts note its AI-focused pivot is redefining long-term prospects.

While Intel lags behind Nvidia in high-end AI chip sales, its broader role in AI inferencing and manufacturing partnerships—like Tesla’s use of its advanced processes—suggests sustained momentum. The turnaround, once seen as fragile, now appears entrenched in the AI era’s infrastructure demands.