Intel Corporation (INTC) saw its stock climb 3.5% to $121.10 in late trading Wednesday, buoyed by a key manufacturing milestone and analyst optimism around server chip demand. The shares traded between $118.13 and $125.11 on volume exceeding 114 million shares, reflecting heightened investor interest in the semiconductor giant's turnaround efforts.
Manufacturing Progress and Foundry Ambitions
The company announced that its advanced 18A-P chip manufacturing process has entered risk production. This phase involves limited production runs to validate performance, identify defects, and ensure consistency before full-scale manufacturing ramps up. Intel revealed at the VLSI Symposium that the 18A-P process delivers a 9% performance boost at the same power level or reduces power consumption by 18% at equivalent speed compared to its 18A node. Naga Chandrasekaran, executive vice president and general manager of Intel Foundry, characterized the achievement as "a journey" and noted that "more work ahead" remains before the process is fully commercialized.
Analyst Upgrades and Market Sentiment
Bernstein analyst Stacy Rasgon raised his price target on Intel to $100 from $65, while maintaining a Market Perform (neutral) rating. Rasgon cited stronger server CPU demand as a key driver, though he cautioned that Intel was "caught significantly off-guard" by the sudden surge and must now adjust its supply chain accordingly. The upgrade came as part of a broader analyst call that also lifted price targets on Advanced Micro Devices (AMD) and Arm Holdings (ARM), framing the recovery as part of a CPU rebound linked to agentic AI—software that handles tasks more independently. AMD shares gained 1.0% to $512.48, and Arm rose 5.7% to $418.88. The PHLX Semiconductor Sector Index (SOXX) climbed 1.4%, while Nvidia (NVDA) slipped 1.3%.
Foundry Financials and Challenges
Despite the positive news, Intel's foundry business remains a financial drag. In the first quarter, Intel Foundry generated $5.4 billion in revenue, up 16% year-over-year, but posted a $2.44 billion operating loss. Overall company revenue rose 7% to $13.6 billion, with Data Center and AI sales jumping 22% to $5.1 billion. The foundry unit's profitability challenges underscore the risks inherent in Intel's ambitious plan to become a major contract chipmaker. The company has warned about intense competition, high and unpredictable capital spending, complex process development issues, product delays, shifting demand, and trade tensions—all of which could threaten its foundry strategy.
Market Context and Outlook
The stock's rally also reflects broader market dynamics. The Nasdaq holiday calendar will see U.S. markets closed on Friday, June 19, for Juneteenth, which could lead to some repositioning ahead of the long weekend. Investors are expected to focus on whether Intel's 18A-P process can translate into committed external customer orders, a key test for the foundry division's viability. The company's ability to secure outside clients while managing internal costs will be critical as it navigates a fiercely competitive landscape dominated by Taiwan Semiconductor Manufacturing Company (TSM) and Samsung.
Intel's journey to restore its manufacturing leadership and diversify its business model remains a high-stakes endeavor. The 18A-P milestone is a positive step, but the path to profitability for the foundry unit is fraught with execution risks. For now, the market is rewarding progress, but sustained gains will depend on tangible customer wins and improved financial performance.
