The market spent the first half of 2026 rewarding Intel (INTC +0.20%) for a manufacturing comeback that is still, in large part, a promise. On Wednesday, it took a meaningful piece of that reward back.
Shares of the chipmaker ended June at $139.63 -- up about 270% for the first half of 2026, within reach of their 52-week high of $142.35 and a world away from their 52-week low of $18.97. Then, on Wednesday, the stock sank 9% to $127.02 as investors dumped chip stocks broadly. And the selling continued on Thursday, with shares falling another 5% to $120.35. The VanEck Semiconductor ETF fell more than 5%, one day after closing out its best quarter on record with a 71% gain, after a report that Meta Platforms may sell excess artificial intelligence (AI) computing capacity raised questions about how scarce AI computing will stay.
With Intel scheduled to report second-quarter results on July 23, the question is whether this pullback is the entry point latecomers have been waiting for -- or a warning about how much success the price already assumes.
Image source: Getty Images.
How the comeback was built
Intel entered 2026 already flush with new backers. The U.S. government took a roughly 10% stake in the company last August through an $8.9 billion investment, and Nvidia followed with a $5 billion investment at $23.28 per share -- a deal completed in December -- alongside plans to co-develop products.
Then the fundamentals started to turn. First-quarter revenue rose 7% year over year to $13.6 billion, and non-GAAP gross margin improved 1.8 percentage points to 41%. Intel's foundry business -- the operation that manufactures chips -- grew revenue 16% year over year to $5.4 billion.
"The next wave of AI will bring intelligence closer to the end user, moving from foundational models to inference to agentic," said CEO Lip-Bu Tan in the company's first-quarter earnings release. "This shift is significantly increasing the need for Intel's CPUs and wafer and advanced packaging offerings."
The biggest catalyst, though, came in May, when The Wall Street Journal reported that Apple and Intel had reached a preliminary agreement for Intel to manufacture some chips for Apple devices. But it's worth emphasizing what the deal is and isn't: It's reportedly preliminary, neither company has formally confirmed it, and Taiwan Semiconductor Manufacturing would likely remain Apple's main chip main chipmaker. But as a signal that Intel's manufacturing has become credible again, it's hard to top -- and the market repriced the stock accordingly.
NASDAQ: INTC
Key Data Points
What July 23 has to prove
The math behind all that enthusiasm is uncomfortable: Intel now carries a market capitalization of about $638 billion -- roughly 12 times its revenue run rate -- for a business that isn't yet profitable. The company posted a generally accepted accounting principles (GAAP) loss of $0.73 per share in the first quarter, and its foundry segment alone posted an operating loss of $2.4 billion in the period, though that loss is narrowing.
Most telling of all: External foundry revenue -- sales of manufacturing services to customers other than Intel itself -- was just $174 million in the first quarter. The entire rerating rests on the belief that this small number becomes an enormous one.
That's why July 23 matters so much. Investors should watch for progress on 18A yields and volumes, evidence that reported customer interest is converting into formal commitments -- management has said those could come in the second half of the year -- and continued narrowing of foundry losses. Management's guidance calls for second-quarter revenue of $13.8 billion to $14.8 billion, so the headline numbers should grow. The stock's fate rests more on the proof points underneath.
So, should investors buy the dip before July 23?
I personally wouldn't. Even after the two-day drop, the stock is still up well over 200% this year. And its valuation already assumes the foundry bet largely succeeds -- even after a roughly 14% two-day pullback. If the July 23 report shows external revenue inflecting and commitments firming, I might change my mind.
