Demand for Intel’s central processors from firms offering AI services was so strong in the first quarter that it sold even chips it had originally written off, a remarkable turnaround that sent the company’s shares soaring on Friday.

The stock surged more than 20% to $83 in midday trading, surpassing its dot-com era peak in 2000 and taking the company’s market value above $416 billion.

The stock hit a record high of $85.22 earlier in the session.

Rival AMD and Arm also gained more than 11% each on growing conviction that inference — the process by which artificial intelligence answers user queries — could restore central processing units to the heart of the industry after years of being eclipsed by graphics chips used in AI training.

Nvidia, the graphics chip giant that has dominated the AI boom, has also sensed the shift and braced for greater competition.

It unveiled last month a new central processor, a rare move into territory it had long ceded to rivals.

Its shares were up more than 1% on Friday.

At least 23 brokerages raised their price targets on Intel’s stock following the better-than-expected first-quarter results and a sales forecast above estimates, with HSBC pointing to growing demand for Intel’s Xeon server CPUs used in AI data centers.

The stock currently has a median price target of $75, up from $46.50 a month ago.

Intel CFO David Zinsner said the forecast was partly driven by higher prices and supply was tight in the first quarter, which forced Intel to dig into finished goods inventory and sell chips it had not expected to move.

“It was either de-spec product or legacy product we had shelved and then we worked with customers. That helped a lot. I am not sure we have that benefit in the second quarter,” he said.

Including Friday’s gains, Intel shares have jumped more than 120% this year, after a surge of about 84% last year, as its turnaround gathers steam under CEO Lip-Bu Tan after years of missteps.

It now trades at around 90 times its 12-month forward earnings estimates – its highest on record – much higher than the 37 times for AMD and 22 for Nvidia.

Earlier this week, Intel scored a symbolic boost to its contract manufacturing ambitions by securing Tesla as a customer for its next-generation 14A chipmaking process tied to Elon Musk’s planned Terafab AI chip complex.

“If the foundry business can start contributing in a meaningful way in 2027 – as expected – that should really show that the company’s turnaround is complete,” said Bob O’Donnell, president and chief analyst at TECHnalysis Research.