Intel Corp (Intel (INTC)) shares climbed nearly 2% in Monday's premarket session as risk appetite returned to equities. Nasdaq futures were up 1.28%, and S&P 500 futures gained 0.79%.

The broader rally comes as investors try to figure out which semiconductor companies will benefit most from the multiyear AI infrastructure spending boom. While NVIDIA Corp. (NVDA) remains the dominant AI chip supplier, analysts say Intel is starting to carve out a bigger role in the buildout.

Intel Joins the AI Buildout

Bank of America Securities analyst Vivek Arya told CNBC on Friday that Intel's second-quarter results showed the company is gaining traction in AI infrastructure, driven by nearly 59% year-over-year growth in its core server CPU business. He said stronger products, a richer product mix, and growing demand from agentic AI deployments are helping Intel regain relevance in data centers.

Beyond improving demand, Arya noted that industrywide shortages of wafers, substrates, and leading-edge manufacturing capacity continue to shape customer decisions. He said Intel's position as a U.S.-based leading-edge manufacturer gives it strategic value as customers look for reliable supply while committing hundreds of billions of dollars to AI infrastructure.

NVIDIA Competition and Hyperscaler Demand

Arya acknowledged that NVIDIA offers a more compelling valuation in the near term, but argued that Intel's investment case rests on the long-term strategic value of its U.S.-based manufacturing footprint. He pointed out that only a handful of companies can produce leading-edge chips, while the industry remains heavily dependent on Taiwan Semiconductor Manufacturing Company Ltd. (TSM) for advanced capacity.

Intel's progress in developing domestic leading-edge manufacturing, including improvements in its 18A and future 14A processes, could become an increasingly important competitive advantage, he said. Arya also highlighted Intel's higher capital spending, strategic hiring efforts, and the appointment of a former SK hynix Inc. (SKHY) CEO to strengthen advanced packaging as signs that management is executing on its long-term strategy.

While acknowledging that Intel's valuation may appear stretched in the near term, Arya said operating leverage from the company's turnaround could allow earnings to quadruple over the next three to four years.

Intel Technical Analysis

Intel's longer-term trend remains constructive, although momentum has cooled in recent weeks. The stock is trading 42.1% above its 200-day simple moving average of $65.76 but sits 15.7% below its 20-day SMA of $110.79 and 18.9% below its 50-day SMA of $115.27. It remains 3.5% above its 100-day SMA of $90.28, suggesting the broader uptrend is intact even as the shares work through a short-term pullback.

Analyst Consensus & Recent Actions: The stock carries a Hold rating with an average price forecast of $109.07. Recent analyst moves include:

• Baird: Neutral (Raises Forecast to $125.00) (July 27)
• DA Davidson: Neutral (Raises Forecast to $100.00) (July 24)
• Morgan Stanley: Equal-Weight (Raises Forecast to $84.00) (July 24)

Top ETF Exposure

• VanEck Semiconductor ETF (SMH): 7.36% Weight
• Invesco PHLX Semiconductor ETF (SOXQ): 6.64% Weight
• Invesco AI and Next Gen Software ETF (IGPT): 7.25% Weight

Significance: Because INTC carries such a heavy weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock.

Intel Price Action

Intel shares were up 1.65% at $93.85 during premarket trading on Monday, according to market data.