(Reuters) – Intel shares rose 6% in premarket trading on Friday after the chipmaker issued stronger-than-expected revenue guidance and increased its capital spending plans, reinforcing investor confidence in its AI-driven turnaround.
The company forecast third-quarter revenue above Wall Street expectations and raised its capital expenditure target for this year to $20 billion from the previously planned $18 billion.
Intel's improving outlook reflects growing demand for its data centre central processing units (CPUs) from customers building artificial intelligence infrastructure. Chief Executive Lip-Bu Tan is seeking to position the company to benefit more broadly from AI-related semiconductor demand despite Nvidia's dominance in AI accelerator chips.
Analysts at Melius Research said the higher capital expenditure signals confidence in stronger cash flows, sustained demand backed by long-term agreements, and increasing interest from foundry customers for advanced packaging and 14A wafer technologies.
Although global chip stocks have faced selling pressure this month, Intel shares have more than doubled since the start of the year on growing optimism over the company's recovery strategy.
Following the results, at least six analysts raised their price targets for Intel, with the median target now standing nearly 9% above the stock's previous closing price, according to LSEG data.