Going into 2025, Intel (INTC 2.68%) was in serious trouble. Rudderless after the surprise departure of former CEO Pat Gelsinger, Intel was losing market share to rival Advanced Micro Devices and struggling to pitch its foundry services business to potential customers.
While Intel isn't out of the woods just yet, investor sentiment has done a dramatic 180-degree turn. Intel stock has more than doubled so far in 2025, and that rally could continue into 2026 as the company's turnaround takes shape.
Image source: Intel.
A new CEO and a rash of deals
Intel appointed former board member and semiconductor industry veteran Lip-Bu Tan as CEO in March. Tan took some painful steps right away, including significant layoffs to bring Intel's cost structure down to earth. He also scrapped some planned foundry investments while tying continued investments in the upcoming Intel 14A node to confirmed customer commitments. "No more blank checks," as Tan put it.
Along with getting Intel's financial house in order on the cost side, Tan struck multiple deals to raise much-needed cash. The U.S. Government took a nearly 10% stake in Intel, converting CHIPS Act grant money that hadn't yet been doled out into equity. Softbank invested another $2 billion, and Nvidia invested $5 billion in a deal that will also produce PC and server CPUs that combine Intel and Nvidia technology.
Intel ended the third quarter with more than $30 billion in cash and short-term investments on its balance sheet.
The foundry is picking up steam
The Intel 18A process node, the final node in Intel's original five-nodes-in-four-years plan, is ready for production. Panther Lake, the company's next-generation laptop chip built on Intel 18A, will begin shipping by the end of the year, with volume shipments following in 2026. Clearwater Forest, one of Intel's upcoming server CPU families that will utilize Intel 18A, is also expected to arrive in 2026.
While the Intel 18A process will get plenty of volume from Intel's own products, the company has struggled to sell the process to outside customers. That story started to change in the final months of 2025. In October, reports emerged that Microsoft would tap the Intel 18A process for its next-generation AI processor. The two companies had previously announced a manufacturing partnership in 2024, but few details were given.
In late November, an analyst posited that Apple was likely to choose the Intel 18A-P process for its low-end M-series chips. If a deal materializes, Intel could produce between 15 million and 20 million Apple chips annually. Additional analyst commentary suggests that Intel could also be in the running to produce some non-Pro iPhone chips on the Intel 14A process starting in 2028.
While nothing has been confirmed, Apple looking to diversify its supply chain and lower its dependence on TSMC would make a lot of sense. If Intel does snag Apple as a foundry customer, it would represent a huge vote of confidence that would likely help bring in additional customers.
NASDAQ: INTC
Key Data Points
It's not too late to buy Intel stock
Despite Intel stock more than doubling this year, it's still well below its all-time high. While the foundry business won't start churning out any profits for at least a few years under the best-case scenario, the long-term opportunity is significant. Demand for AI chips has been booming, putting pressure on manufacturing and packaging capacity at foundry leader TSMC. Intel's cutting-edge 18A and 14A processes are coming at just the right time to take advantage.
Intel's new manufacturing processes will also help the company become more competitive in its core PC and server CPU markets, where it has been shedding market share for years.
It will take time for Intel's turnaround to translate into sustainable revenue and profit growth, but as market sentiment shifts in a positive direction, the stock could be in for another major rally in 2026.
