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Intel (INTC), once a titan of semiconductor manufacturing, has undergone a series of transformations in recent years. From falling behind rivals such as Advanced Micro Devices (AMD) and Taiwan Semiconductor Manufacturing Company (TSM) to launching an ambitious foundry business, the company’s roadmap has seen many ups and downs.
Now that Intel is backing away from its aggressive 18A foundry push and focusing on its next-generation 14A node, the question is whether this is another misstep or a strategic reset for a comeback.
While Intel shares are up 12.3% year to date, they have fallen nearly 40% from their 52-week high of $37.16, indicating a potential buying opportunity. Let’s see if now is the right time to invest or sit on the sidelines.
The 18A Pivot: A Misstep Or a Strategic Reset?
According to Reuters, Intel’s newly appointed CEO, Lip-Bu Tan, is setting a new course for the company’s troubled contract manufacturing division. According to the report, Tan is thinking about switching from the 18A manufacturing process to a newer generation process known as 14A.
According to the report, the 14A process is a more mature node with higher cost efficiency and is expected to be competitive by late 2026. The decision could result in a write-down worth hundreds of millions of dollars. According to sources, Intel’s board of directors may begin discussions as early as this month about potentially halting the external promotion of 18A. However, due to the financial and strategic complexities of the decision, a final verdict may not be issued until later this year.
Intel, while declining to comment directly on the matter, reiterated in a statement that it is still committed to strengthening its roadmap, rebuilding customer trust, and improving its financial health. The shift from 18A to 14A is being framed as a strategic move to outperform TSMC, the dominant force in global chip manufacturing. In contrast, Intel believes the 14A process, which is still in development, will give it a performance and efficiency advantage over TSMC’s upcoming N2 technology, making Intel’s foundry business more appealing to industry heavyweights such as Apple (AAPL) and Nvidia (NVDA), which rely heavily on TSMC.
Mixed Results Amid Strategic Restructurings
The report also stated that the company must meet existing commitments, such as limited production of chips for Amazon (AMZN) and Microsoft (MSFT) using the 18A process. Additionally, Intel is still planning to use 18A for internal chip production. During the Q1 earnings call, management had stated that Panther Lake, which will be built on Intel’s internal 18A node, is expected to ship its first SKU by the end of the year, with wider commercial availability in 2026.
Intel reported $12.7 billion in first-quarter revenue, which was flat year-over-year. Adjusted earnings per share fell to $0.13 from $0.18 the previous year. Intel’s Data Center and AI segment (DCAI) reported better-than-expected first-quarter results due to stronger-than-expected demand from a few hyperscalers. However, the company expects Q2 to be weaker sequentially due to normalization of one-time customer pull-ins and ongoing macroeconomic uncertainty.
Intel Foundry Services (IFS) remains a long-term strategic bet, and management reiterated that progress will be gradual. CEO Lip-Bu Tan described the internal foundry development process as “step-by-step,” emphasizing the importance of first establishing internal trust with Intel product groups.
The Road Ahead
Tan’s leadership is still in its early stages, but he has already begun to reshape the company’s internal structure. This leaner organization is driving cost reductions.
Intel intends to significantly reduce operating expenses over the next two years, aiming to save roughly $17 billion in 2025 and $16 billion in 2026. A complete shift away from selling 18A to foundry clients would be the most daring move of his career so far. It’s a calculated risk. By focusing on a more advanced process, Intel hopes to reestablish its credibility in the foundry industry and position itself as a serious competitor to TSMC.
Whether that gamble pays off depends not only on the successful rollout of 14A, but also on Intel’s ability to deliver on time and re-establish trust with major clients. Intel will report its second-quarter earnings on July 24. We’ll know more about this then. Analysts expect the company to report $11.88 billion in revenue, a 7.4% decrease year-over-year, and adjusted earnings of $0.01 per share, compared to $0.02 per share in Q2 2024. Analysts predict a 5.1% decrease in revenue to $50.4 billion for the year.
Despite these ongoing efforts, the company continues to recover from a difficult period. Intel posted a staggering loss in 2024, its first unprofitable year since 1986. Analysts now expect the company to report a loss per share of $0.30 per share in 2025. Earnings are expected to rise by 153% in 2026, to $0.16 per share.
Morgan Stanley analyst Joseph Moore maintains a “Hold” rating, indicating that Intel’s turnaround will take time and will likely be gradual. Moore stated that, while delays in foundry and AI initiatives until 2027 may positively redirect the company’s focus, he remains cautious and has set a price target of $23.
Is INTC Stock a Buy, Hold, or Sell on Wall Street?
Overall, Wall Street rates INTC stock a “Hold.” Of the 38 analysts covering the stock, one rates it a “Strong Buy,” 32 rate it a “Hold,” and five suggest a “Strong Sell.” The stock is trading close to its average target price of $22.42. However, the Street-high estimate of $62 suggests the stock has upside potential of 182% over the next 12 months.
