Intel (INTC 3.78%) stock looked dead in the water at the start of 2025, but a series of developments drove an incredible rally for the chip stock. Shares of Intel surged 84% in 2025, according to data provided by S&P Global Market Intelligence, outperforming both Nvidia and AMD. While Intel's turnaround is still a work in progress, investor sentiment has certainly shifted in a positive direction.
Image source: Intel.
A new CEO gets to work
Following the surprise ouster of former Intel CEO Pat Gelsinger in late 2024, Intel appointed industry veteran Lip-Bu Tan as CEO in March of 2025. Tan wasted little time slashing costs, laying off employees, and scrutinizing entire lines of business. As Tan said in a letter to employees: "There are no more blank checks."
Intel's push to build a foundry business continued under Tan, but the company is now taking a more disciplined approach. Investments in the upcoming Intel 14A process will be based on confirmed customer commitments. Given the escalating costs of developing leading-edge nodes, Intel needs considerable external volume to justify fully developing the advanced node.
Some good news emerged toward the end of the year for Intel's foundry business. While it's only a rumor, Apple is reportedly considering using a version of the Intel 18A process for some of its M-series processors in 2027. A deal with Apple would be a massive win for Intel, providing a critical vote of confidence in its foundry operations.
Deals, deals, deals
One of the main drivers of Intel stock's performance in 2025 was a series of deals Tan struck. First, Tan secured an $8.9 billion equity investment from the U.S. Government, unlocking existing grant money that hadn't yet been delivered. Intel also received a $2 billion equity investment from SoftBank, further strengthening its balance sheet.
The biggest news on the deal front, though, was an unexpected pact with Nvidia. In addition to a $5 billion investment from Nvidia, the companies will develop data center and PC CPUs that incorporate technologies from both Intel and Nvidia. In the PC market, Intel CPUs with Nvidia graphics will soon become a reality. In the data center market, custom Intel CPUs will be built for Nvidia that integrate the company's NVLink networking technology.
Unthinkable a few years ago, the deal with Nvidia could be a game changer for Intel.
Is Intel stock a buy?
Despite a massive gain in 2025, Intel stock still sits well below its all-time high. 2026 will be a critical year as the company attempts to turn itself around. Panther Lake, the first chips produced on the Intel 18A process, will begin showing up inside laptops later this month. New server CPUs built on Intel's 18A process are also expected to arrive later this year, capitalizing on the booming demand for servers from the AI industry.
NASDAQ: INTC
Key Data Points
For long-term investors with some patience, Intel appears to be a solid investment. While a repeat performance for the stock in 2026 will be challenging, a major foundry customer win could propel the stock significantly higher.
