Intel stock continues to surge after extended Google partnership

Shares of Intel extended gains for a seventh consecutive session on Thursday after the chipmaker announced an expanded collaboration with Google to develop next-generation processors for artificial intelligence data centers.

The stock rose about 3% in morning trading, building on a powerful rally that has seen shares climb 47.5% over the current seven-session streak.

If sustained, the run would mark Intel’s largest seven-day gain on record and its longest winning streak since September 2023, when it advanced for nine straight sessions.

The stock had already closed near a five-year high on Wednesday, reflecting growing investor confidence in the company’s AI positioning.

Expanded partnership targets AI data center growth

The agreement marks a multiyear collaboration between Intel and Google, under which the chipmaker will supply “multiple generations” of its Xeon data-center central processing units (CPUs).

The deal extends an existing relationship, with Google continuing to deploy Intel’s processors across a broad range of workloads, including inference and general-purpose computing.

Google is also expected to adopt Intel’s latest Xeon 6 chips as part of its infrastructure buildout.

The partnership underscores the growing importance of CPUs in AI ecosystems, particularly as the industry shifts from training models to deploying them at scale.

In addition to CPUs, the two companies will expand co-development of custom infrastructure processing units (IPUs). These chips are designed to offload networking, storage, and security functions from CPUs, improving efficiency and enabling more predictable performance in hyperscale AI data centers.

“Scaling AI requires more than accelerators - it requires balanced systems,” said Intel CEO Lip-Bu Tan. “CPUs and IPUs are central to delivering the performance, efficiency and flexibility modern AI workloads demand.”

Rising demand for CPUs driven by AI shift

The collaboration comes at a time when demand for traditional computing chips is resurging, driven by the rapid evolution of AI applications.

Companies are increasingly moving away from training large models toward inference—the process of running AI systems in real-world environments—creating renewed demand for general-purpose CPUs.

The rise of agentic AI systems, which perform complex, multi-step tasks, is further accelerating this trend.

These workloads require substantial processing power beyond specialized accelerators, positioning CPUs as a critical component of AI infrastructure.

Wall Street analysts have noted that demand for server CPUs is beginning to outstrip supply, raising the possibility of new bottlenecks in AI development.

This dynamic could benefit Intel, which has been working to regain market share after losing ground to competitors during the early stages of the AI boom.

Strategic moves strengthen Intel’s position

The expanded Google partnership adds to a series of strategic moves by Intel aimed at reinforcing its position in the AI ecosystem.

Earlier this month, the company announced plans to pay US$14.2 billion (approx. $24.9 billion) to repurchase a 49% stake in its Ireland chip fabrication joint venture from Apollo Global Management.

The move signals confidence in its manufacturing business and ongoing CPU momentum.

Intel has also aligned itself with major AI-driven initiatives, including plans to participate in the Terafab AI chip complex project alongside ventures linked to Elon Musk.

As demand for AI infrastructure continues to scale, the combination of strengthened partnerships, rising CPU relevance, and strategic investments is helping reshape investor sentiment around Intel.

The latest rally suggests markets are increasingly pricing in a more central role for the company in the next phase of AI development.