Intel Shares Surge on Strong AI Forecast and Foundry Growth, Leading Semiconductor Rally

U.S. stock markets faced headwinds from geopolitical tensions surrounding Iran while technology companies delivered mixed earnings results, with semiconductor firms showing particular strength. The standout performance came from Intel, which beat first-quarter expectations and delivered a forecast that shattered Wall Street estimates, signaling the chipmaker's long-anticipated turnaround as it begins to capitalize on massive artificial intelligence infrastructure investments across the industry.

Intel's blockbuster guidance proved to be the day's dominant narrative in the technology sector. The struggling chipmaker reported strong first-quarter results and projected second-quarter revenue of $13.8 billion to $14.8 billion, well above analyst expectations. According to Bloomberg's analysis, Intel's Intel Foundry Services segment grew 16%, demonstrating traction in its contract manufacturing business, an area critical to competing with rival TSMC. The company's resurgence reflects a broader trend of enterprises rushing to build out AI computing capacity, positioning Intel to finally benefit from years of heavy infrastructure spending. Intel's shares surged nearly 20% following the announcement, underscoring investor confidence in the company's turnaround narrative.

Intel's momentum was not isolated within the semiconductor space. Texas Instruments shares jumped the most in more than a quarter-century after the chipmaker delivered a surprisingly strong forecast bolstered by robust demand for data center and industrial equipment, sectors benefiting from the AI boom. However, not all technology firms found success. IBM saw shares decline despite posting software sales in line with estimates, as investors remained concerned about artificial intelligence disruption to its business model. Canon experienced a steeper decline, suffering its worst day in a year after cutting its outlook due to soaring memory costs, potentially signaling broader pricing pressures ahead in the electronics sector.

Enterprise software showed mixed results. SAP beat estimates with cloud revenue growth fueled by its integration of artificial intelligence agents, while Infosys disappointed with a sales forecast that trailed expectations as global enterprises curtailed spending on large IT projects amid geopolitical and economic uncertainties. This divergence suggested that while AI-focused technology investments remained robust, broader enterprise IT spending was beginning to show signs of caution.

The positive technology earnings were tempered by broader market concerns. Iran-related tensions weighed on investor sentiment throughout the trading session, contributing to overall market weakness despite individual technology stock outperformance. The geopolitical jitters reflected ongoing concerns about potential regional escalation and its implications for global economic stability and energy markets.

Intel's strong forecast also proved significant for the company's expansion into contract manufacturing. According to reporting on the company's strategic developments, Tesla announced plans to use Intel's next-generation 14A manufacturing process for chips at its advanced AI chip facility in Austin, marking a major breakthrough for Intel's foundry business and its first significant customer win for the technology. This contract underscored growing confidence in Intel's manufacturing capabilities and provided concrete validation of the company's strategic pivot toward becoming a major foundry player beyond its traditional processor business.