In 2025, Intel Corporation witnessed a notable surge in its stock price, appreciating approximately 80%, a development driven by key leadership changes and significant external investments. Early-year pessimism surrounding the company shifted as Lip-Bu Tan took on the CEO role in March, which was subsequently bolstered by investments from strategic entities including the U.S. government, Softbank, and Nvidia during the third quarter. Despite these positive movements, analysts remain cautious about Intel’s capacity to sustain momentum into 2026.
Intel’s current market capitalization stands at about $173 billion, which is substantially lower than other leading companies in the artificial intelligence (AI) sector. This valuation indicates considerable room for growth should Intel effectively execute its turnaround strategy and reclaim a leading position in semiconductor technology.
Financial Performance and Fab Utilization
Understanding Intel’s present financial snapshot requires careful consideration. The company’s adjusted non-GAAP earnings per share (EPS) for the last quarter were reported at $0.23, a figure that might not fully justify the current share price near $36.50. However, projections suggest that profitability will improve in the forthcoming year.
A crucial component driving this potential improvement is Intel’s initiative to transition more chip production from Taiwan Semiconductor Manufacturing Company (TSMC) back to its own fabrication facilities. Under the previous CEO Pat Gelsinger’s turnaround plan, Intel invested heavily in new manufacturing plants, notably the Intel 3 fab in Ireland and the 18A fab located in Chandler, Arizona. While these fabs were under construction, Intel outsourced nearly all leading-edge chip manufacturing to TSMC, which enjoys a high gross margin of about 59.5% as a near-monopoly provider.
Conversely, Intel’s internal foundry operations have generated significant operating losses, totaling approximately $2.3 billion in the most recent quarter. These losses are attributed primarily to the high fixed costs associated with state-of-the-art fabs and the current underutilization of production capacity.
With the commencement of high-volume manufacturing at the Intel 3 fab in late 2024 and the 18A fab in early 2025, the company expects to reduce these losses as capacity utilization increases. The strategy to shift production away from third-party fabs toward its own manufacturing lines should result in substantial cost savings and improved margins, signaling a pivotal turning point for Intel's profitability trajectory toward 2027.
Management has acknowledged that initial yields from the 18A process remain below optimal levels but expect progressive improvements throughout 2026. As yields rise, operating margins are anticipated to strengthen correspondingly, further supporting profitability.
Technological Advancements and Competitive Positioning
Intel positions its 18A process node as a key element in its technological advancement and industry competitiveness. This node is the company's attempt to meet or potentially surpass the technological standards set by competitors, particularly in relation to TSMC’s 2nm node.
Both Intel and TSMC plan to incorporate gate-all-around (GAA) transistor architectures within their respective nodes, with Intel aiming to introduce a unique feature called "backside power" ahead of its competitor. This innovation relocates power delivery lines from the front to the back of the chip, increasing space on the front side for additional transistors, which enhances performance and energy efficiency.
Intel’s use of high-numerical-aperture (high-NA) extreme ultraviolet (EUV) lithography tools is another technological differentiator under consideration. These machines can pattern chip designs with approximately 8 nanometer precision, surpassing older tools with 13 nanometer resolution. The application of high-NA lithography could simplify manufacturing processes by reducing the number of steps, equipment, and factory floor space needed, thus optimizing production efficiency and cost structures.
Although Intel has confirmed plans to implement high-NA lithography for its forthcoming 14A node, it has not excluded the possibility of integrating this technology earlier within the 18A process. Intel has already procured several high-NA machines and recently completed their acceptance testing, indicating readiness for manufacturing deployment.
External Customers and Market Expansion
Intel is actively pursuing opportunities to become a major competitor to TSMC in foundry services. This involves attracting external customers to utilize its fabrication capabilities. Company executives have indicated that progression of the next generation 14A node may depend on securing a significant external client, underscoring the importance of customer acquisition in the company’s strategic roadmap.
Recent industry rumors suggest potential interest from prominent customers. Notably, Apple is speculated to use the 18AP node, an enhanced variant of 18A, for its lower-tier M-series processors. Industry analysts and market observers have commented positively on Intel's upcoming 14A node, with speculative interest also noted from Nvidia and Advanced Micro Devices (AMD). Given these developments, announcements concerning external customer engagements may become more prominent during 2026.
Looking Ahead
The year 2025 marked an initial phase in Intel’s turnaround journey, characterized by a modest return to profitability, deployment of advanced process technologies, restructuring to reduce operational costs, and strategic investments attracted from government and private-sector stakeholders. Under the new leadership of CEO Lip-Bu Tan, the company is poised to deepen these efforts.
Moving into 2026, Intel anticipates tangible progress in several key areas: increased utilization and profitability of newly built fabs, advancements in chip manufacturing technology, and successful expansion of its external foundry business. Collectively, these factors will contribute to shaping Intel’s trajectory and its stock market performance in the year ahead, making it a critical period for the company’s future.