Intel's Wednesday Surge: Can the Rally Be Taken Seriously?

On a recent Wednesday, Intel (NASDAQ: INTC) stock experienced a remarkable 10.8% intraday jump. The catalyst seemed surprisingly modest: Bernstein SocGen Group analyst Stacy Rasgon adjusted his price target upward by just $1, moving it from $35 to $36. On the surface, this raises an obvious question—should a single-dollar price target increase really drive a double-digit percentage surge in a stock already trading above $53 per share? The disconnect between stimulus and response suggests something more complex was at play in the market that Wednesday.

Why Intel Stock Jumped on Wednesday

The immediate explanation points to Rasgon’s modest adjustment, but that narrative falls apart upon closer inspection. After all, Rasgon maintained his “market perform” rating, declining to offer any upgrade. The real catalyst appears to have been a separate note from RBC Capital. While RBC also carried a sector perform rating on Intel—essentially a “hold”—the firm made a more constructive argument: Intel is likely to beat earnings in its upcoming Q4 financial report.

According to RBC’s analysis, personal computer demand remains “OK,” and server CPU demand holds steady with supply constraints expected to persist into Q1 2026. These conditions should combine to deliver what RBC termed only a “slight” earnings beat. Yet even a modest beat seems to have been sufficient to ignite investor enthusiasm heading into Intel’s earnings announcement, scheduled for the day after Wednesday.

Digging Deeper: What Wednesday’s Momentum Actually Reflects

The Wednesday rally ultimately reveals something telling about market behavior. A marginal earnings beat from an unprofitable company was enough to override more cautious structural concerns. This suggests the reigning investment calculus focuses heavily on near-term news flow rather than longer-term trajectories.

The rally also reflects a collision of competing narratives. One analyst (Bernstein) suggests caution with an unchanged rating despite a higher price target. Another (RBC) hints at optimism about quarterly results. Investors appear to have chosen the more bullish interpretation, at least on Wednesday. Whether that choice is justified requires examining Intel’s fundamental position.

Beyond Wednesday’s Pop: The Underlying Reality

Beneath the optimism lies a troubling reality that no single earnings beat will resolve. Intel remains unprofitable as of its most recent financial statements. The company continues to burn cash—a pattern that analysts surveyed by S&P Global Market Intelligence expect to persist through 2027. No quarterly beat, however impressive, resolves a multi-year challenge of that magnitude.

From a fundamental perspective, Intel merits at best a hold rating, and arguably a sell. The Wednesday enthusiasm, while understandable in the moment, doesn’t align with the company’s underlying economics or trajectory. Betting on Intel based on expectations of a slight earnings beat appears to prioritize immediate noise over substantive concern.

Should You Act on Wednesday’s Momentum?

The tempting argument goes as follows: Intel just jumped 10% on Wednesday, and the market is pricing in a near-term earnings beat. Shouldn’t investors join the momentum trade?

Consider instead this alternative perspective: The Motley Fool’s Stock Advisor research team recently published their list of the 10 best stocks for investors to purchase—and Intel did not make the cut. This is telling. Historically, when Netflix appeared on that list in December 2004, a $1,000 investment at that time would have grown to approximately $470,587. When Nvidia joined the list in April 2005, a comparable $1,000 commitment would have multiplied to roughly $1,091,605. Stock Advisor’s track record shows a 930% average return, dramatically outpacing the S&P 500’s 192% return over comparable periods.

The implication is clear: Thursday morning may bring an earnings beat that validates Wednesday’s rally. But the longer-term opportunity set likely resides elsewhere, with companies demonstrating stronger profitability trajectories and cash generation. Intel’s Wednesday surge captures a moment of optimism, not necessarily a genuine inflection point in the company’s fortunes.

The prudent approach remains cautious. Ride out Wednesday’s momentum if you already hold Intel shares, but resist the urge to chase the rally based solely on expectations of a modest quarterly beat. The real opportunity lies in identifying businesses with durable competitive advantages and improving financial trajectories—qualities that appear elsewhere in the market today.