Intels 26-Year High|While AI Giants Fire 18,000 Workers

The Day the Chip Stock Stole the Show

Intel just hit a price level the stock market hasn't seen since the year 2000. Not a recovery. Not a rebound. A 26-year high — on the same day that Meta announced it would cut 8,000 jobs and Microsoft made history with its first-ever voluntary buyout program in 51 years.

Thursday's session was defined by a paradox. The headline story was Big Tech shedding workers. Meta plans to eliminate 10% of its workforce — roughly 8,000 positions — beginning May 20, scrapping 6,000 open roles in the process. Microsoft, simultaneously, offered voluntary retirement packages to 7% of its U.S. employees whose age and tenure combined reach 70 or higher. The Wall Street Journal confirmed it: the first buyout program in the company's 51-year history. The market's reaction to both was swift and negative. Microsoft shares fell more than 4% on $110 billion in AI capital commitments that are now forcing workforce decisions no one anticipated.

And then there was Intel.

Intel (INTC) surged past $70, touching its highest level since 2000. AMD, following Intel's coattails after its own 12-session winning streak, climbed alongside. The SOX semiconductor index extended its rally even as the broader S&P 500 pulled back from recent record highs. The S&P 500 reached a new all-time high of 7,022 just one week ago, and Thursday's session saw it give back ground as software stocks — Salesforce dropped 9%, ServiceNow fell sharply — absorbed selling pressure. But Intel moved in the opposite direction from everything else that mattered in tech.

The question the day's numbers raise is this: why is a company that lost $18 billion in 2024 and nearly exited the chip manufacturing business altogether now trading at a level it hasn't seen in a quarter century?

The Elon Musk Factor — and What Intel Was Actually Missing

The trigger arrived on Tesla's Q1 earnings call Sunday evening. CEO Elon Musk confirmed that Tesla's Terafab project — a planned AI chip complex in Austin, Texas, involving Tesla, SpaceX, and xAI — will use Intel's next-generation 14A manufacturing process for its in-house AI chips.

That confirmation mattered more than it sounds. Intel CEO Lip-Bu Tan had warned analysts last year that Intel might exit chip manufacturing entirely if it could not secure a major external customer for its advanced nodes. It had been in conversations with large clients about 14A — the successor to 18A, the node currently ramping — but had not publicly named a buyer. Musk's comment on the earnings call changed that. As Yahoo Finance reported: "The move could hand Intel its first major outside customer for the technology and a badly needed win in its effort to build a contract-manufacturing business to rival Taiwan Semiconductor Manufacturing Co."

Then Intel reported its own Q1 numbers Thursday after the close. Revenue came in at $13.6 billion — $1.4 billion above the midpoint of company guidance. Non-GAAP gross margin hit 41%, roughly 650 basis points above what the company had projected. AI-related businesses now represent 60% of Intel's total revenue and grew 40% year over year. These are not the numbers of a company limping through a turnaround. EPS came in at $0.29 against prior guidance of breakeven.

The stock had already risen 78% in 2026 before Thursday's session. Polymarket had assigned a 92% probability of an EPS beat before the report. The market was positioned for a win. But the win delivered — $1.4 billion above the revenue midpoint, 650 basis points above gross margin guidance — was larger than the positioning implied.

Here is where the logic gets complicated. Intel's 26-year high is built on two things: a foundry customer that has not yet signed a formal contract, and one quarter of demand outpacing supply. The 14A manufacturing process is not in production. Terafab's target of 2-nanometer chip production by 2029 is three years away. The gap between what Musk said on an earnings call and what gets fabricated in Austin is not small.

That gap is where the risk lives.

Three Years to 2029 — What Has to Go Right

Intel's rally has a historical echo. In early 2000, Intel was also trading near $70, riding the infrastructure wave of the internet boom. Data centers were being built. Chip demand was real. And then it wasn't — at least not at the pace the market had priced in. Intel spent the next two decades underperforming the semiconductor index it had once defined.

The current setup is different in one critical way. In 2000, Intel was the dominant player facing disruption. In 2026, Intel is the turnaround candidate that has already been disrupted. AMD surpassed Intel on server CPU revenue at the end of 2024. Xeon unit shipments fell to a 13-year low. The company lost $18 billion last year. Lip-Bu Tan's credibility as a turnaround executive is the central variable — and Thursday's Q1 beat gives him the earnings record to sustain that credibility through at least one more quarter.

The scenario where this continues working: Intel 18A completes its ramp in Chandler, Arizona, yields improve to competitive levels, and the Terafab relationship converts from verbal confirmation to a formal supply agreement. If Panther Lake — Intel's first product on 18A — ships on schedule and performs in line with TSMC's comparable nodes, the foundry thesis becomes investable rather than speculative. The next data point is the Intel 18A yield disclosure, which Tan has suggested will be provided before mid-year.

The scenario where this stalls: the 14A timeline slips, Terafab encounters the same procurement and permitting delays that have pushed every major U.S. fab project past its original schedule, and Intel's AI-related revenue growth of 40% decelerates as hyperscalers consolidate their GPU spending around Nvidia. Salesforce falling 9% on Thursday — despite solid underlying metrics — is a reminder that AI enthusiasm has a finite tolerance for delayed payoffs.

What the next 90 days will reveal is whether Intel's supply constraint is a genuine demand signal or a production bottleneck that will ease and reset the growth rate. The company said demand outpaced supply across all businesses in Q1. If Q2 guidance reflects a supply catch-up with stable pricing, the rally has real footing. If supply catches up and pricing softens, the margin expansion that drove Thursday's beat reverses quickly.

The benchmark to watch: Intel's Q2 gross margin guidance on the next call. If it holds at or above 40% without the favorable mix effects that contributed to Q1's 41%, the 26-year high is telling you something real. If it guides back to the mid-30s, the market will ask whether Thursday was a one-quarter event or the beginning of a durable recovery.

Intel at $70 in 2026 is not the same as Intel at $70 in 2000. The difference is that this time, the company knows exactly what it needs to prove — and has named the quarter in which it will prove it.