Intel Corporation (NASDAQ:INTC) saw its stock decline 2.5% to $109.68 in early trading on Friday, July 10, 2026, underperforming the broader semiconductor sector. The iShares Semiconductor ETF (NASDAQ:SOXX) slipped only 0.6%, while rivals Advanced Micro Devices (NASDAQ:AMD) rose 1.3% and Nvidia (NASDAQ:NVDA) gained 1.7%. Intel was the lone decliner among major chip stocks as the market traded mixed.
The decline comes as investors weigh Intel's progress in its foundry business against persistent losses and a heavy reliance on internal revenue. Intel Foundry reported $5.4 billion in segment revenue for the first quarter of 2026, but the vast majority—over $5.2 billion—came from Intel's own product units. CFO David Zinsner noted that less than $200 million came from external customers, describing it as “legacy business that we have mainly on the wafer side.”
Intel's latest filing shows external foundry sales of $174 million, up sharply from $31 million a year ago—a jump of about 461%. However, the company said most of that increase came from Altera, which became an external customer when Intel gave up control of that business. The reclassification moved Altera off Intel's main books, meaning the surge does not reflect new major chip customers. External revenue represents just 3.2% of total foundry revenue and only 1.3% of Intel's total revenue.
The foundry segment posted an operating loss of $2.437 billion in Q1, equivalent to 45% of its revenue. Annualizing external revenue of $174 million per quarter yields roughly $696 million per year, compared to Intel's market capitalization of about $557 billion—a ratio of nearly 801 times. While this metric is unusual given Intel's large processor operations, it highlights how small external foundry sales are relative to market expectations.
William Blair analyst Sebastien Naji offered a more optimistic long-term view, suggesting Intel could regain its edge in server CPUs over the next one to two years. The Coral Rapids chip, expected in 2028, could be a key catalyst. Intel executives argue that the shift from AI model training to inference is boosting demand for its CPUs and advanced packaging. CEO Lip-Bu Tan described this transition as “significantly increasing the need for Intel’s CPUs and wafer and advanced packaging offerings.”
Intel expects second-quarter revenue between $13.8 billion and $14.8 billion, with adjusted earnings per share of 20 cents. However, downside risks remain substantial. Intel has warned it may halt or drop its next-generation 14A process if locked-in demand is insufficient. If external revenue continues to come primarily from Altera and legacy wafer jobs while the foundry remains over $2 billion in the red per quarter, the stock could face a lower valuation multiple.
Intel is scheduled to report Q2 results after the closing bell on July 23. Key metrics will include foundry revenue excluding Altera, foundry operating loss, data center and AI sales, and gross margin. William Blair noted that Friday's session does not rule out a 2028 server rebound, but Intel must lay out a financial transition from factories used mainly for its own chips to fabs funded by external customers before then.
