Shares of Intel (INTC) rose 10% on Friday following a White House meeting between CEO Lip-Bu Tan and President Donald Trump, who declared that the US government was “proud to be a shareholder” in the struggling chipmaker.
The rally extends a notable turnaround that has seen INTC stock more than double since the federal government pumped $8.9 billion into the chipmaker last August through the CHIPS and Science Act, taking a 10% stake at $20.47 per share.
www.barchart.com
Trump’s enthusiastic endorsement of Truth Social praised Tan as “very successful” and highlighted Intel’s latest Core Ultra 3 Series processors, emphasizing that they were designed, built and packaged entirely in the United States.
The timing is politically convenient as the administration pushes domestic semiconductor manufacturing, although the federal investment has already generated unrealized gains exceeding $10 billion, and the stock closed at $45.55. Just a few months ago, Trump demanded Tan’s resignation over alleged conflicts of interest stemming from the CEO’s connections to Chinese companies.
Tan was named CEO of Intel in March 2025 amid declining sales and instability under predecessor Pat Gelsinger. Additionally, Tan defended his four-decade career in the industry and pledged to operate within the highest ethical standards.
The broader semiconductor sector rallied along with Intel, as Broadcom (AVGO), ASML (ASML), and Micron (MU) rose. Will government support for Intel help address competitive challenges and lay the foundation for a sustainable recovery over the next decade?
Intel faces a critical inflection point as new CEO Lip-Bu Tan drives an aggressive cultural transformation while grappling with severe supply constraints in the client and server markets. The company’s stock volatility reflects uncertainty over whether manufacturing improvements and strategic partnerships can restore competitiveness against AMD and ARM-based alternatives that have steadily eroded market share.
The immediate challenge involves ramping up production of Panther Lake, Intel’s first major product based on the troubled 18A manufacturing process. The first Panther Lake chips shipped at the end of the year, with wider availability expected in the first quarter of 2026.
The supply shortage has emerged as a short-term windfall that masks deeper competitive concerns. Strong demand from hyperscale customers seeking long-term supply deals for traditional servers caught Intel by surprise.
Intel is moving its internal manufacturing capacity from client products to server products, while making lower sales volumes in both markets. The semiconductor giant expects supply constraints to peak in the first quarter before improving over the next 12 months.
The strategic partnership with Nvidia (NVDA) provides crucial validation for Intel’s x86 ecosystem. Nvidia will invest $5 billion and collaborate on custom server processors that integrate the NVLink fabric for AI workloads, as well as client processors.
This multi-generational deal required an extensive engineering evaluation of Intel’s roadmap, indicating that NVIDIA found competitiveness was improving despite current challenges. The bucket structure for client graphics avoids margin-diluting transfer costs similar to those of Lunar Lake’s integrated memory. Long-term viability depends on securing external foundry customers for process node 14A, planned for late 2026 or early 2027.
Management emphasized that the development of 14A benefits from earlier customer involvement during the definition phase compared to 18A. Until external revenues materialize, Intel Foundry aims to break even in operating profits in 2027 primarily through internal product ramps.
Analysts following INTC stock forecast that adjusted earnings will grow from $0.34 per share in 2025 to $2.84 per share in 2029. If the tech stock is priced at 25 times earnings, which is reasonable given its growth estimates, it should trade around $70 by the end of 2028, indicating a 55% upside potential from current levels.
Of the 42 analysts covering INTC stock, three recommend “Strong Buy”, one recommend “Moderate Buy”, 32 recommend “Hold”, one recommend “Moderate Sell” and five recommend “Strong Sell”. The average price target for Intel stock is $37, down from the current price of $45.
www.barchart.com
On the date of publication, Aditya Raghunath had no positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. This article was originally published on Barchart.com
