Intel Corporation (INTC) saw its shares hit an all-time high of $94.75 in early trading Thursday, surging 12% above the previous close. The rally was fueled by reports that Alphabet Inc.'s Google (GOOGL) may utilize Intel's advanced EMIB (Embedded Multi-die Interconnect Bridge) packaging technology for its next-generation AI processors, marking a significant endorsement of CEO Lip-Bu Tan's turnaround plan.
Foundry Division in Focus
The potential deal with Google comes as Intel's foundry business, Intel Foundry, reported $5.42 billion in revenue for the first quarter of 2026, though it posted a $2.44 billion loss. The division, which manufactures chips for external clients, is central to Intel's strategy to regain competitiveness in the semiconductor industry. Investors are now weighing whether the foundry can attract major AI chip customers and finally contribute positively to profitability.
Apple Also Evaluating Intel's 18A-P Process
Adding to the positive sentiment, research firm TrendForce reported Wednesday that Apple Inc. (AAPL) is evaluating Intel's 18A-P process for its upcoming M-series chips. If confirmed, this would be a major win for Intel, as Apple has relied on its own in-house designs and Taiwan Semiconductor Manufacturing Co. (TSM) for production. The 18A-P process is part of Intel's next-generation manufacturing technology, promising improved performance and efficiency.
Google's TPU Roadmap
According to reports, Google's TPU v8e may use Intel's EMIB technology, which allows different silicon components to be integrated into a single chip. This is crucial as AI processors grow in size and complexity. Google recently introduced its eighth-generation Tensor Processing Units (TPUs), including the TPU 8t for training and TPU 8i for inference, but did not mention Intel as a supplier at that time. However, the two companies have a long-standing partnership, having announced a multiyear deal on April 9 for Intel Xeon CPUs and custom infrastructure processing units (IPUs) for Google's AI and cloud systems.
Financial Performance and Outlook
Intel's first-quarter revenue reached $13.6 billion, a 7% year-over-year increase, and the company guided for second-quarter revenue between $13.8 billion and $14.8 billion. CFO David Zinsner cited "unprecedented demand for silicon" as a key driver. Adjusted earnings per share for the current quarter are projected at 20 cents. The company also repurchased Apollo Global Management's 49% stake in the Ireland Fab 34 venture for approximately $14.2 billion, using cash, short-term investments, and a $6.5 billion term loan.
Market Context and Competition
The rally has pushed Intel's valuation to nearly 90 times forward earnings, significantly higher than rivals Advanced Micro Devices (AMD) at 37 times and Nvidia (NVDA) at 22 times. Analysts caution that the stock may be outpacing fundamentals, with some of the first-quarter lift attributed to selling older inventory, a trend that may not repeat in Q2. Meanwhile, competition remains fierce: AMD and Arm Holdings (ARM) have also gained on speculation that CPUs could reclaim AI inference workloads, while Nvidia has entered the CPU market with its own processor.
Risks Ahead
Intel's latest filing highlighted risks, noting that without sufficient committed demand for its next-generation Intel 14A manufacturing process, the company could pause or cancel that node and future technologies. The foundry business continues to require significant capital, and investors are watching closely for concrete customer contracts. Bob O'Donnell of TECHnalysis Research told Reuters that if the foundry business ramps up in 2027, it would signal that the "turnaround is complete."
