Nvidia picked Intel's Xeon 6 and invested $5 billion in Intel, yet analysts still trail INTC in price forecasts.
Intel Corporation (NASDAQ: INTC) trades at $140.05, holding its ascending trendline on the 2H timeframe. The RSI reads 55.21, which is neutral-bullish, while green candles continue to absorb sell orders close to the trendline-resistance alignment. The rally has lifted the stock roughly 465% over the past 12 months from a $18.97 low. The 12-month average analyst price target of $93.93 now sits 33% below the actual share price, a widening gap between where analysts have modelled the stock to end and where it trades today.
Intel's July investment thesis does not hinge on the Apple deal or Trump's social media post, topics covered in recent issues. It turns instead on two facts: NVIDIA invested $5B in Intel, and it selected Intel Xeon 6 as the host CPU in its DGX Rubin NVL8 AI systems. Put another way, the most important GPU company of the moment is endorsing Intel's CPU.
**Jensen Huang Picked Intel: What the Xeon 6 Selection for DGX Rubin Means**
NVIDIA could have paired its Rubin GPU with any CPU, but it chose Intel Xeon 6 to power the DGX Rubin NVL8, the AI system expected to power the data centre for the next two to three years. CEO Lip-Bu Tan recently said Xeon 6 now serves as "the orchestration layer and critical control plane for the entire AI stack." He also noted that the CPU-to-GPU ratio for inference is beginning to shift from 1:8 to 1:1, meaning the number of CPUs needed to support each GPU is rising rather than falling. The prior narrative held that GPUs would ultimately take over the CPU role.
Jensen Huang's decision to build the DGX Rubin NVL8 on Xeon 6, coupled with the $5B equity investment in Intel, represents the strongest signal yet from a third party that Intel's CPU is competitive. This is not an Apple rumour or a social media announcement. It is a CPU architecture decision from the world's largest AI infrastructure company.
Q1 2026 showed the first revenue impact of this AI CPU positioning. Data Center and AI reached $5.1B, up 22% year over year. Non-GAAP EPS was $0.29, while GAAP EPS was negative $0.73 after heavy foundry investment charges. Intel Foundry generated $5.4B in revenue, up 16% year over year, which puts the Foundry segment at more than $20B in annualised revenue. It still posts negative earnings, but it is no longer a rounding error. CFO David Zinsner described the quarter as showing "unprecedented demand for silicon," and Q2 guidance is $13.8B to $14.8B, indicating continued sequential revenue strength. About 60% of this quarter's revenue mix now comes from AI-linked sources, compared with just under 25% a year ago.
**The Google Deal: Multiyear, Locked Pricing, Custom ASIC Co-Development**
Google's Q1 2026 announcement is the second major confirmed hyperscaler commitment supporting the Intel thesis. Google signed a multiyear deal for continued use of Intel Xeon processors in its workload-optimised instances, including the newest Xeon 6 processors that power C4 and N4 instances. The companies are also partnering on custom-designed ASIC Infrastructure Processing Unit (IPU) chips intended to boost utilisation, reduce system complexity and scale more efficiently for AI tasks.
CEO Tan said the agreements span three to five years, with locked volume and pricing. That is a rare and tangible commitment in an industry, providing revenue visibility over the term. The structure directly addresses the main criticism of Intel's revenue run-rate so far this year: that demand is order-driven and front-loaded rather than real.
Added to the list of commitments are NVIDIA's $5B equity investment and Xeon 6 product selection, Google's multiyear Xeon and custom ASIC deal, and Microsoft's previously confirmed 18A wafer deal. Apple foundry negotiations are ongoing.
This deal stack explains the gap between the current price and the $93.93 average analyst target. The gap reflects how quickly the new Intel story is unfolding compared with the pace at which sell-side analysts are updating their models. Cantor Fitzgerald raised its price target to $150 from $90 in early July but maintained a Neutral rating, noting its target sits only 13.9% above current levels.
Current valuation checks per Simply Wall St show Intel trading at a price-to-sales multiple of 13.1x, against a suggested fair multiple of 15.1x, reflecting its combination of foundry and AI exposure. The stock scores 2 of 6 on its broader valuation checks. INTC is not cheap on an absolute basis, but it does not look obviously expensive relative to peers and its confirmed customer base.
**INTC Technical Setup: Trendline Defense at $140, RSI 55.21, Target $159.90**
On the 2H chart, INTC is holding the ascending multi-touch black trendline after a series of rejections from the descending red trendlines that began at highs above $169. It remains above the 200-period EMA at $106.07 and is printing higher lows. The RSI at 55.21 is neutral-bullish, with room to rise before becoming overbought, and shows no divergence. Buyers are absorbing sell orders on green candles near the trendline-resistance confluence.
Overhead resistance sits between $150.43 and $159.97. If INTC holds the trendline and confirms a move above $150.40, the next target is $159.90. If it breaks below $126.20, the next target is $117.07.
- **Entry:** Long above $150.40, once trendline and resistance are cleared
- **Target:** $159.90, trendline bounce extension
- **Stop loss:** Close below $126.20, if the ascending trendline fails
- **NVIDIA selection:** Xeon 6 chosen as host CPU for DGX Rubin NVL8; $5B equity investment
- **Google deal:** Multiyear, locked pricing for 3–5 years; custom ASIC IPU co-development
- **Next earnings:** July 23, 2026
**Why Did NVIDIA Invest $5 Billion in Intel and Select Xeon 6 for Its AI Systems?**
NVIDIA allocated $5B of equity to Intel and chose Xeon 6 as the host CPU for its DGX Rubin NVL8 AI systems, a product expected to set the benchmark for data centre AI systems in the next product cycle. Lip-Bu Tan explained: "The CPU has become the orchestration layer, the control plane of the entire AI infrastructure. In inference workloads, we're starting to shift from 1 CPU to 8 GPUs towards 1 CPU to 1 GPU." Jensen Huang's choice of Xeon 6 is a product architecture decision by the company that defines the benchmark for AI infrastructure. It is not an investment or a promotion. It is the strongest available validation of Intel's CPU competitive position.
**What Did Intel Report in Q1 2026, and What Is Q2 Guidance?**
In Q1 2026, Data Center and AI (DC&A) revenue was $5.1 billion (+22% YoY), and Foundry revenue was $5.4 billion (+16% YoY). Non-GAAP EPS was $0.29, compared with GAAP EPS of negative $0.73, due to foundry capital investment charges for 18A. Intel expects Q2 revenue to rise sequentially to between $13.8 billion and $14.8 billion. CFO David Zinsner said: "AI-linked revenue is now approximately 60% of the quarterly mix, as compared with a year ago when it was under 25%." He described the quarter as defined by unprecedented demand for silicon and by Intel's determination to use its entire factory network to maximise output. He also said: "Our long-term deals span three to five years, with locked volumes and pricing."
**Why Is the Average Analyst Target $93.93 When Intel Trades at $140?**
The 33% gap shows how quickly the Intel story has evolved relative to the time sell-side analysts need to update their models. Cantor Fitzgerald raised its 12-month price target to $150 on July 1 while keeping a Neutral rating, stating the new target sat 13.9% above the current share price. Most Wall Street firms have not yet updated their models to account for NVIDIA's $5B equity investment, the Google multiyear deal, and a full risk production announcement for 18A. The Simply Wall St analysis puts "fair value" Price/Sales at 15.1 versus the current 13.1, suggesting Intel is not significantly overvalued relative to peer P/S multiples at current trading levels.
**Bottom Line**
Intel is up 465% over the past year and trades 33% above the consensus 12-month analyst price target of $93.93. The gap exists because the story, now anchored by NVIDIA's investment and product choice and by the signed Google and Microsoft deals, has moved far ahead of sell-side analysts' ability to update their models. These commercial agreements are no longer rumours.
The Intel story now includes a $5 billion equity investment from NVIDIA, Xeon 6 selected as the host CPU for DGX Rubin NVL8, and a Google multiyear agreement with locked volume and pricing.