Shares surged as Intel landed a multiyear Google Cloud partnership and joined Elon Musk's Terafab chip-manufacturing venture in a single week, vaulting the stock 29% from $48.03 on April 1 to $61.91 today. The back-to-back announcements rewrite the narrative around a company that spent years losing ground in AI — but the stock now trades well above the average analyst price target, raising the question of how much good news is already priced in.
Google Wants Intel's Chips for the Next Phase of AI
Google committed to using multiple generations of Intel processors to power its AI data centers, potentially giving the chipmaker a stronger position in an AI market dominated by Nvidia.
The deal reflects a shift in the industry from training AI models to deploying them, which fuels demand for the generalist CPU chips Intel makes best.
Intel and Google will also co-develop custom chips that handle networking and storage tasks, freed up by surging demand from advanced AI agents that require far more processing power than simple chatbots.
Terafab Could Be the Foundry Customer Intel Has Been Desperate For
Terafab, with an estimated $20–$25 billion investment, will use a vertically integrated model, and Intel's chip-manufacturing expertise is expected to validate the project's feasibility while providing Intel with a crucial anchor client for its foundry strategy.
Morgan Stanley estimates total capital spending could reach $35–$45 billion, likely shared between Tesla and SpaceX — a large revenue pool for Intel's money-losing manufacturing arm. However, there is still no SEC filing or formal press release detailing the partnership's financial terms.
Analysts Are Racing to Catch Up — But Consensus Still Says Hold
KeyBanc raised its Intel price target to $70 on April 6 , while Cantor Fitzgerald hiked its target from $45 to $60 today. Yet the median Wall Street target sits at roughly $47, and 30 analysts still rate the stock a Hold, with targets ranging from $20 to $65 — signaling deep disagreement about Intel's ability to execute.
The Stock Has Outrun the Fundamentals — For Now
INTC is up **62% year-to-date , yet Intel's foundry operation is still unprofitable, losing money as it ramps manufacturing and absorbs underutilization costs.
To sustain a $60+ price, Intel must show healthy volumes from its newest manufacturing process, convert Terafab and Google orders into quarterly revenue above $13.5 billion, and push gross margins back above 35%. Until those numbers materialize, the rally is a bet on promises, not profits.