Intel Corporation (INTC) shares soared 14% on Friday to close at a record $124.92, following a report that the chipmaker has reached a preliminary agreement to manufacture chips for Apple Inc. (AAPL). The surge pushed Intel's year-to-date gain to nearly 240%, marking a dramatic turnaround for a company that has long struggled to regain its footing in the advanced chip manufacturing race.
The Wall Street Journal reported that Apple and Intel have hammered out a preliminary deal after more than a year of discussions. Both companies declined to comment when contacted by Reuters. The agreement would see Intel's foundry business produce Apple's M-Series chips, which power MacBooks and iPads, with the potential to eventually manufacture A-Series processors for iPhones, according to Bank of America analysts led by Vivek Arya.
Bank of America raised its price target on Intel to $96 from $56 but maintained an Underperform rating, cautioning that the stock's recent rally has already priced in the potential Apple deal. The firm estimates that if Intel captures roughly a quarter of Apple's chip business, annual foundry sales could reach $10 billion by 2030. However, analysts noted that talks are “likely still ongoing” and that the deal is a long-term endeavor, requiring two to three years for spending, qualification, and production scaling.
The reported deal represents a major milestone for Intel's foundry business, which has been seeking a high-profile client like Apple to validate its manufacturing capabilities and secure reliable orders. It also comes as Washington intensifies pressure for more U.S.-based chip manufacturing, a key issue in the ongoing semiconductor supply chain debate.
Apple's motivation to diversify its supply chain stems from its heavy reliance on Taiwan Semiconductor Manufacturing Co. (TSM), which is grappling with surging demand for AI chips from Nvidia (NVDA) and Advanced Micro Devices (AMD). During Apple's latest earnings call, CEO Tim Cook flagged that iPhone sales have been impacted by disruptions at a contract manufacturer, underscoring the risks of single-source dependencies.
Intel's recent financial results have shown signs of improvement. First-quarter revenue came in at $13.6 billion, up 7% year-over-year. Data-center and AI sales climbed 22% to $5.1 billion, while Intel Foundry posted $5.4 billion in revenue, a 16% increase. CEO Lip-Bu Tan highlighted a sharp rise in AI-related demand, stating it is “significantly increasing the need” for Intel's CPUs, wafers, and advanced packaging. CFO David Zinsner added that the company is working to grow available supply through its factory network.
Despite the optimism, Bank of America warns of near-term headwinds. The firm has not yet incorporated the Apple deal into its official model due to unclear terms and flagged that initial foundry margins could be squeezed by depreciation, low yields, and typical startup expenses. The analyst team also noted that even if finalized, the deal would take years to contribute meaningfully to Intel's bottom line.
For Intel, the reported Apple deal represents both a milestone and a challenge. After Apple famously abandoned Intel chips in Macs in 2020, a reunion would be a powerful endorsement of Intel's foundry ambitions. But investors are looking for more than headlines—they want to see whether a marquee client like Apple can deliver steady demand, improved yields, and real profitability over the long term.
