Intel Corporation (NASDAQ: INTC) shares edged higher in pre-market trading Wednesday, recovering some ground after Tuesday's decline. The stock traded at $135.80 as of 4:26 a.m. EDT, up 2.66% from Tuesday's close of $132.28, which had fallen 6.14%. U.S. markets were not yet open; Nasdaq pre-market hours run from 4:00 a.m. to 9:30 a.m. ET.
Despite the recent volatility, Intel shares remain approximately 12% above their June 17 close of $121.10. The stock surged 10.64% on June 18, with 233.91 million shares traded—75% above its 65-day average—following news that former President Donald Trump said Apple had agreed to collaborate with Intel on chip design and manufacturing in the United States. Intel touched a 52-week intraday high of $141.45 on Monday and was trading about 4% below that level early Wednesday.
The market is pricing in not just Intel's core CPU business but also hopes for its foundry push. A foundry produces chips for third-party designers. Trump's statement last week that Apple would team up with Intel for U.S.-based chip production sent shares soaring, though neither Apple nor Intel officially confirmed the report, and no details on specific chips were provided.
Intel's external foundry business remains a small fraction of its overall operations. In the first quarter, the company reported $174 million in foundry revenue from outside customers, while total foundry sales reached $5.4 billion. That means external customers accounted for just over 3% of foundry revenue. The unit posted a $2.4 billion operating loss, highlighting the heavy investment required to ramp up capacity.
Intel bolstered its foundry leadership last week by appointing Seok-Hee Lee as executive vice president of Intel Foundry. Lee, formerly chief of SK Hynix and SK On, will oversee advanced packaging, system integration, and back-end manufacturing. Advanced packaging involves combining chip components in a single package to enhance performance. Lee stated Intel can "lead in advanced packaging," a capability investors see as a potential entry point into AI supply chains, even without taking large orders from Taiwan Semiconductor Manufacturing Co. (NYSE: TSM), which currently builds most advanced chips for Nvidia and Apple.
The broader semiconductor sector faced headwinds Tuesday. The Philadelphia Semiconductor Index fell 7.9%, while the Nasdaq Composite dropped 2.2%. Nvidia (NASDAQ: NVDA) declined 4.1%, and Micron Technology (NASDAQ: MU) slid 13% ahead of its earnings report due after Wednesday's close. Ross Mayfield, investment strategy analyst at Baird, noted that the AI chip trade is "vulnerable to relatively small shifts in sentiment," which could also affect Intel even as its foundry story remains more company-specific than the memory-chip rally that has lifted Micron and others.
Intel's first-quarter earnings provided some support. Revenue came in at $13.6 billion, up 7% year-over-year, with non-GAAP EPS of 29 cents. For the second quarter, Intel guided revenue between $13.8 billion and $14.8 billion. CFO Dave Zinsner attributed the strong quarter to "strong demand and better than expected available supply," with non-GAAP gross margin of 41% driven by higher volume, favorable product mix, and pricing.
However, the stock's premium is fragile. Without official confirmation from Apple, and with foundry losses persisting, the market's enthusiasm could fade quickly if 18A yields disappoint or if customers only test Intel with small runs while sending volume business to TSMC. Converting foundry interest into real production revenue remains the key challenge for Intel's stock to sustain its recent gains.
