Semiconductor giant Intel (INTC) has been on a tear. The stock is up 169% year-to-date, hitting all-time highs last month, and has returned more than 300% since being kicked out of the Dow Jones Industrial Average in November 2024. That's roughly seven times the return of Nvidia (NVDA), the company that replaced it in the index.

Now comes the hard part: proving the rally is justified. Intel reports second-quarter results Thursday after the market close, and the stakes are high.

The Numbers to Watch

Analysts expect Intel to report revenue of $14.40 billion, up from $12.86 billion a year ago, according to data from MarketDash. The company has beaten revenue estimates for seven straight quarters and in eight of the last ten quarters overall.

On the bottom line, analysts are looking for earnings per share of $0.19, a big improvement from the $0.10 loss per share in last year's Q2. Intel has beaten EPS estimates for three consecutive quarters and in seven of the last ten.

Consistency like that is why investors have piled in. But the stock is now trading at elevated levels — around $105, down slightly on Wednesday — and the bar for a positive reaction is high.

What Analysts Are Saying

Wall Street has been warming up to Intel ahead of the report. Several firms raised price targets in recent weeks:

• Morgan Stanley: Equal-Weight, target raised from $73 to $75
• Susquehanna: Neutral, target raised from $80 to $115
• KeyBanc: Overweight, target raised from $110 to $155
• UBS: Neutral, target raised from $83 to $121
• TD Cowen: Hold, target raised from $75 to $115

KeyBanc's $155 target stands out, implying roughly 47% upside from current levels. But with the stock already up so much, even a solid beat might not be enough to push shares higher if guidance disappoints.

The Big Picture: Intel vs. Nvidia

Intel's resurgence is one of the wildest stories in the market this year. The stock spent 25 years in the Dow going essentially nowhere — from $39.16 to $26.43. Then it got swapped out for Nvidia, and suddenly the old chipmaker found new life.

Since the swap, Intel is up 300.9%. Nvidia? Up 40.3%. That's a seven-to-one outperformance for the company that was supposedly too old and slow for the Dow.

Part of the story is AI. Intel has been positioning itself as a key player in the AI chip market, and investors are buying the narrative. The company recently expanded its partnership with Google Cloud to accelerate enterprise AI transformation. Management will likely talk up that deal and others on the earnings call.

But there are also headwinds. Intel launched layoffs that hit its Data Center and AI group — exactly the high-growth areas that are supposed to drive future revenue. Analysts will want to know whether those cuts signal slowing growth or just normal cost discipline.

Intel is also the fifth-largest holding in the iShares Semiconductor Sector Index ETF (SOXX), at 5.54% of assets. So its earnings could move the entire sector.

What to Watch on the Call

Beyond the numbers, here are the key themes to listen for:

• AI demand commentary: Is Intel's AI business accelerating? Management's tone on orders and pipeline will be critical.
• Google Cloud partnership: How much revenue could this generate, and are there similar deals in the works?
• Layoffs: The Data Center and AI group cuts raise questions. Are they about efficiency or a slowdown?
• Guidance: Q3 revenue and EPS forecasts will set the tone for the rest of the year.

Intel stock has already had an incredible run. Whether it continues depends on whether the company can deliver results that match the hype. Thursday's report will tell us a lot.