Intel's stock climbed more than 40% in September 2026, powered by AI-driven demand expectations rather than new earnings, and now trades at a far steeper valuation than its chip peers. Fool's analysis cautions that such gaps between price and profit rarely close without a correction.
Intel's stock rockets past $120
Intel's stock climbed more than 40% in September, peaking above $127 intraday before settling around $123 by month's end. One session on September 21 delivered a 12.14% single-day pop, according to Crypto Briefing. The rally builds on an already strong 2026, with Intel up around 250% for the year, making it the fifth-best-performing stock in the S&P 500, according to Fool.
AI demand expectations drove the move
Meta's rollout of its Muse AI agent lifted expectations for data-center CPU demand, Crypto Briefing reported. Intel CEO Lip-Bu Tan added that the company can currently meet only about 50% of existing CPU demand. Second-quarter revenue reached $16.1 billion, a 25% year-over-year increase. Melius Research responded by raising its price target to $165.
Valuation now dwarfs chip industry peers
That rally has pushed Intel to 84 times this year's earnings estimates and 62 times 2027's estimates, Fool reported. Its foundry unit compares to Taiwan Semiconductor, which has averaged about 23 times earnings over the past decade — so Intel would need to nearly triple its earnings after 2027 to trade at the same multiple. On the computing side, Nvidia currently trades for just 28 times earnings, a far cheaper benchmark than Intel's current price tag.
What investors are watching next
Intel had already traded as high as $142 earlier in 2026 before pulling back, and the Melius target implies further upside if the rally holds. Crypto Briefing noted that investors weighing an entry should watch whether Intel can sustain revenue growth above 20% in coming quarters and whether its foundry business turns from cash drain to cash generator. Without both, the stock at 60-plus times forward earnings is essentially a leveraged bet on AI demand continuing to accelerate — a bet history suggests stock market rallies built on richer multiples rarely sustain indefinitely.
Sources: Fool, Crypto Briefing
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