To The Moon

$Intel(INTC)$

Intel Corporation has once again returned to the spotlight, this time with a surge that caught even bullish analysts by surprise. Last Friday, shares of the semiconductor giant soared 10.19%, capping an impressive weekly gain of 17.57%. The rally placed Intel squarely back on investors’ radar and reignited discussions about whether its long-awaited turnaround is finally materializing. The key catalyst this time? Renewed speculation that Apple may tap Intel to produce a portion of its advanced-node processors as Intel re-enters the foundry arena with greater focus and urgency.

The rumor-driven rally has added to what was already a blockbuster year for the stock. Intel is now up more than 100% year-to-date, a striking reversal for a company previously considered a laggard in the semiconductor race. With shares hovering near the $40 mark, a critical psychological and technical threshold, investors are wondering whether this is an opportune moment to take profits—or whether Intel still has room to run as it pushes deeper into its multi-year transformation.

This article explores the forces behind Intel’s unexpected comeback, the foundry revival story, the potential significance of any Apple partnership, Intel’s evolving fundamentals, valuation considerations, and the strategic question that long-term investors will need to confront: Is $40 a selling point, or merely the midpoint of a much larger comeback trajectory?

The Sudden Rally: What Sparked Intel’s 17.57% Weekly Surge?

Last week’s powerful surge was not rooted in earnings updates or macroeconomic events, but in a renewed wave of optimism surrounding Intel’s foundry ambitions. Reports from supply-chain analysts—particularly from Asian semiconductor research houses—suggest that Intel has dramatically improved its “visibility” within Apple’s list of potential advanced-node partners.

In semiconductor jargon, “visibility” refers to the level of interest, engagement, or early qualification progress between chip designers and foundries. The suggestion that Intel has advanced far enough to be considered a realistic candidate is, in itself, a major reputational win. Apple is arguably the most valuable customer in the semiconductor world. The company’s tight relationship with TSMC has historically been almost unbreakable, with Apple absorbing well over 20% of TSMC’s leading-edge capacity at times.

The market did not need confirmation from Apple or Intel to respond positively. Investors recognized that even the possibility of Intel winning a fraction of Apple’s next-generation chip production would be transformational—not purely for earnings, but also for perception. Intel’s foundry business has long been criticized as aspirational rather than competitive. These new rumors effectively re-opened the conversation and suggested that Intel might be further along in its turnaround than the market assumed.

Why Apple Matters: More Than a Rumor, It’s a Signal of Credibility

To understand why markets reacted so strongly, one must appreciate the unique weight Apple carries in the semiconductor ecosystem.

Apple as a “Validation Client”

Apple is not just another customer—it is the gold standard. If Apple validates a manufacturing partner, the rest of the industry pays attention. A partnership would serve as a powerful endorsement of Intel’s process roadmap, signaling to Qualcomm, AMD, NVIDIA, and other fabless companies that Intel’s technology may once again be world-class.

Breaking TSMC’s Lock on Advanced Nodes

Apple has historically pushed foundries to their limits, both technologically and operationally. From the A17 Pro chips used in iPhones to the M-series chips powering Macs, Apple’s design philosophy requires cutting-edge nodes that deliver high efficiency and performance with minimal thermal overhead. TSMC has been the only foundry consistently capable of meeting these requirements.

If Intel were to secure even a secondary role—such as producing lower-volume units, backup supply, or early R&D wafers—it would mark a genuine shift in industry dynamics. It would break TSMC’s monopoly on Apple’s most advanced designs and elevate Intel into a new era of foundry competitiveness.

A Vote of Confidence for Intel’s New Leadership

Under CEO Pat Gelsinger, Intel has aggressively laid out an ambitious roadmap:

• Intel 7

• Intel 4

• Intel 3

• Intel 20A

• Intel 18A

The latter two nodes, based on RibbonFET and PowerVia technologies, are expected to leapfrog TSMC’s and Samsung’s equivalents in several performance-per-watt metrics. So far, investors have treated these claims with caution. Apple’s interest—rumored or confirmed—serves as real-world validation that Intel’s offerings may now be engravable in the top tier once again.

Intel’s Transformation: A Turnaround Years in the Making

The rally and renewed optimism did not appear out of thin air. Intel has spent the past three years pursuing one of the most aggressive restructurings in the company’s history.

Reinventing the Foundry Business

Intel Foundry Services (IFS) was relaunched in 2021 with plans to open Intel’s manufacturing to external clients. The company committed tens of billions of dollars to new fabrication plants (fabs) in Arizona, Ohio, and Europe. These efforts aim to build the western hemisphere’s largest and most advanced semiconductor manufacturing network—a move strategically aligned with U.S. and EU national security priorities.

However, the project has not been smooth. Intel has faced:

• Delays in node transitions

• Loss of manufacturing advantage to TSMC

• Rising costs and capex burdens

• Skepticism from major chip designers about Intel’s consistency

Still, Intel’s leadership has been consistent: the company must return to being a premier manufacturer if it hopes to survive long-term.

The Role of Government Subsidies

U.S. CHIPS Act subsidies have played a significant role in Intel’s resilience. By positioning itself as the cornerstone of America’s semiconductor independence initiative, Intel secured billions in incentives, tax credits, and research support. This financial tailwind allows Intel to sustain heavy investment cycles without punishing the balance sheet as severely as in prior decades.

Reorganizing the Core Business

Beyond the foundry initiative, Intel has streamlined internal divisions, reduced operating expenses, exited non-core businesses, and prioritized efficiency. The company is turning from a sprawling giant with siloed product groups into a more cohesive and focused organization.

Can Intel Actually Compete With TSMC Again?

This is the question at the heart of the Intel investment thesis. Technological leadership, long thought irrevocably lost, appears within reach again—but competition remains fierce.

Why Intel Fell Behind

For nearly a decade, Intel struggled with its 10nm process, delaying next-generation products and enabling AMD to steal significant market share. TSMC capitalized on the gap, executing flawlessly with its 7nm, 5nm, and now 3nm process nodes.

The market punished Intel severely:

• Intel’s data center dominance eroded

• AMD’s EPYC line captured a double-digit server share

• Apple abandoned Intel CPUs for its own Apple Silicon

• NVIDIA and Qualcomm bypassed Intel in favor of TSMC

The combination of technological stagnation and strategic missteps crushed Intel’s valuation.

Why Intel May Be Gaining Ground Again

Intel’s new architecture, RibbonFET, offers transistor geometry advantages that could restore competitiveness. PowerVia, a backside power delivery mechanism, further enhances efficiency by reducing routing congestion.

Early third-party assessments suggest Intel’s 18A node could be ready by 2025—and on par with or better than TSMC’s equivalent. If this proves true, Intel may achieve something it hasn’t managed in over a decade: regain process leadership.

The rumored Apple engagement suggests industry insiders believe Intel is closer to this goal than previously expected.

Investor Sentiment: From Despair to Cautious Optimism

Intel’s year-to-date doubling signals a dramatic shift in investor sentiment.

What Has Changed?

1. Belief in Intel 18A Investors previously doubted Intel’s ability to execute. But the company has hit milestones on schedule.

2. Global push for semiconductor diversification Apple, NVIDIA, AMD, Qualcomm, and even hyperscalers want fewer supply-chain risks tied to Taiwan.

3. The valuation was deeply discounted Prior to the rally, Intel traded at a depressed multiple relative to its historical averages and peers.

4. Short interest unwound Intel was one of the most shorted large-cap tech stocks. The rally forced many short sellers to cover, adding technical momentum.

But Sentiment Remains Fragile

Intel must still prove its roadmap’s viability. The share price may have moved ahead of fundamentals, especially given current earnings pressure.

Financial Performance: Strengths, Weaknesses, and Durability

While Intel’s long-term vision is promising, the company’s current fundamentals remain mixed.

Revenue Still Under Pressure

After several years of declining revenue due to lost market share, weak PC demand, and high investment spending, Intel’s topline remains below its mid-2010s peak. Recovery has begun, but growth remains modest compared to peers like NVIDIA and AMD.

Margins Have Been Hammered

Intel’s operating margins have contracted significantly due to:

• Lower data center revenue

• High costs associated with the foundry build-out

• R&D expenses related to architectural redesign

• Lower utilization of existing fabs

Although margins may rebound as utilization increases, the current profile is far from ideal.

Cash Flow Stabilizing

Intel has improved working capital management and trimmed costs. Free cash flow is improving, though still constrained by aggressive capex.

The company has also maintained its dividend, although at times investors have questioned whether it remains sustainable given the investment cycle.

Valuation: Does Intel Still Offer Upside?

With Intel hitting $40, valuations begin to enter more complex territory.

Price-to-Earnings Ratio

Intel currently trades at a forward P/E multiple higher than its pre-turnaround average, but lower than other semiconductor peers. Relative to NVIDIA (over 30x forward earnings) and AMD (mid-20s), Intel looks inexpensive—but this comparison is not apples-to-apples, as growth trajectories differ dramatically.

Price-to-Sales Ratio

Intel trades at a P/S ratio still below its long-term historical average. This suggests the market is not fully pricing in a successful turnaround.

Discounted Cash Flow Considerations

Future cash flow is heavily dependent on:

• Successful execution of Intel 18A

• Winning major foundry clients

• Stabilizing PC and server business

• Improving fab utilization

A return to healthy free cash flow (as the capex cycle moderates) could justify valuations north of $50 in a bullish scenario. However, if Intel’s roadmap falters, the stock could revert back below $30.

Is Intel’s Year-to-Date 100%+ Gain Sustainable?

A stock doubling in a calendar year naturally triggers profit-taking discussions. Yet context matters.

The Rally Comes After Years of Underperformance

Even after the surge, Intel remains far below its all-time highs near $68. The stock has recovered from deeply oversold levels but has not yet priced in a full-scale turnaround.

Momentum is Strong, But Volatility Will Rise

Semiconductor stocks historically deliver rapid moves followed by harsh corrections. Intel’s transformation rests on execution risk, making volatility a near certainty.

$40 Is a Psychological Level—Not Necessarily a Ceiling

While some traders may lock in profits at round numbers, long-term investors typically evaluate broader catalysts:

• Has the company fundamentally improved?

• Are future prospects stronger today than six months ago?

• Does the market fully appreciate the upcoming foundry narrative?

In Intel’s case, many long-term investors believe the turnaround story is still early-stage.

Should Investors Sell at $40—or Continue Holding?

This is the central question. The answer depends on your time horizon and risk tolerance.

Reasons to Consider Taking Some Profits

1. The rally was rumor-driven Intel has not confirmed any Apple partnership. If expectations cool, shares could retrace.

2. Fundamentals are still catching up Revenue growth and margins remain weak relative to historic norms.

3. Significant execution risk Intel’s fabric roadmap is unproven at scale; delays could cause rapid sentiment reversal.

4. Competition remains fierce TSMC is not standing still. Samsung is aggressively investing. NVIDIA and AMD continue expanding.

5. Overbought conditions Technical indicators show that Intel has become overbought in the short term.

For investors who entered at lower levels (e.g., $20–$25), trimming at $40 to lock in partial gains may be reasonable.

Reasons to Continue Holding

1. Intel’s transformation is multi-year, not multi-week If the foundry narrative is real, the stock could have much farther to run—perhaps toward $50–$60 over time.

2. Valuation still below fair value on multi-year horizons Intel remains one of the cheaper large-cap semiconductor plays.

3. Apple partnership could be a game-changer Even a small production share would shift market perception profoundly.

4. Geopolitical tailwinds strongly favor Intel Governments want domestic chip production—and Intel is the prime recipient.

5. AI-related revenue potential Intel is not currently viewed as an AI leader, but future server chips and accelerators could surprise.

For long-term believers in Intel’s turnaround, $40 may be just a checkpoint—not a cash-out point.

Intel's Upcoming Transformation: What to Watch Next

If you're evaluating whether to hold or sell Intel, here are the critical milestones to monitor.

1. Intel 18A Production Readiness (2025)

Third-party confirmation that Intel 18A is competitive will be the single most important event in Intel’s future.

2. Official Foundry Customer Announcements

Intel has said that major customers will be disclosed in the coming quarters. If Apple appears on that list, sentiment could shift drastically.

3. Data Center Return to Growth

Intel must regain relevance in the high-margin server market.

4. PC Market Recovery

A recovery in global PC shipments would stabilize Intel’s core business.

5. Fab Utilization Rates

Higher utilization yields higher margins—essential for earnings growth.

If these milestones trend positively, the current rally may only be the beginning.

Final Verdict: At $40, Should You Take Profit or Keep Holding?

Intel’s 2024–2025 rally reflects renewed investor confidence in its transformational roadmap. The surge, fueled by the Apple rumor, underscores the potential magnitude of Intel’s resurgence if it successfully returns to process leadership.

If you are a short-term trader:

Taking partial profits at $40 is prudent. The stock is extended, and sentiment could cool quickly without confirmation from Apple.

If you are a long-term investor (2–5 years):

Holding remains justified. Intel’s valuation still does not fully price in a successful turnaround or a competitive foundry business. Upside exists—if execution follows through.

If you entered below $25:

A hybrid approach may be best: trim a portion to secure gains while keeping a core position for the multi-year story.

Key Takeaways

• Intel surged 17.57% last week due to speculation about a potential Apple foundry partnership.

• Apple validation would dramatically boost Intel’s credibility as it attempts to relaunch its foundry business.

• The company is in the midst of a historic transformation under CEO Pat Gelsinger.

• Despite a 100% year-to-date rally, Intel remains below long-term valuation peaks.

• Execution risk is high, but upside potential remains substantial if Intel hits its roadmap.

• At $40, profit-taking makes sense for short-term traders, but long-term investors may prefer to hold.