For Intel (INTC), 2025 was an eventful year, but not one that necessarily changed its narrative.
The storied American chipmaker got a new CEO and won massive investments from the US government, Nvidia (NVDA), and SoftBank (SFTBY). Those developments helped push the stock up 86% for the year, ahead of gains for the “Magnificent Seven” Big Tech stocks and Intel rival Advanced Micro Devices (AMD). At the same time, Intel’s crucial manufacturing segment still lacks a major external customer — something it needs to make the cash-bleeding business viable.
“Intel’s exiting the year with some optimism that they will be a relevant chip manufacturer in the US at some point in time … and that was definitely an uncertain statement at the start of the year,” MorningStar analyst Brian Colello told Yahoo Finance.
At the same time, he noted, “There wasn’t the massive sort of deal that really establishes Intel, either, in manufacturing.”
The company’s technology is largely responsible for the digital revolution and Silicon Valley’s reputation as a global innovation hub: Intel invented the world’s first microprocessors, or computer chips, and the x86 architecture, a critical blueprint for designing computer chips. Its co-founder Gordon Moore created Moore’s Law, a theory that defined the pace of innovation in the semiconductor industry for more than half a century. The company has continued to make its own computer chips, even as the rest of the industry has gone “fabless” — outsourcing manufacturing to firms like Taiwan’s TSMC (TSM).
But years of missteps and poor investment decisions put Intel’s manufacturing segment behind TSMC, which in turn caused its products to lose their edge to competitors. As its chips — CPUs for servers, laptops, and desktops — have lost market share to rivals AMD and Arm (ARM), its manufacturing business has been stripped of the scale it needs to remain viable.
Four years of an aggressive turnaround effort by former CEO Pat Gelsinger to revive Intel’s manufacturing arm by opening it to outside customers sent investors fleeing. The massive amount of spending required to reboot the foundry, along with its uncertain success, spooked Wall Street.
The arrival of Lip-Bu Tan, who was named chief executive in March following the board’s ousting of Gelsinger in late 2024, began to renew faith in the company’s potential turnaround. While Intel’s strategy remains mostly unchanged under Tan, analysts explained, investors have applauded his sober tone, cost-cutting measures, and wide-ranging industry connections.
Intel CEO Lip-Bu Tan speaks at the company’s Annual Manufacturing Technology Conference in San Jose, Calif., in April 2025. (Reuters/Laure Andrillon) ·REUTERS / Reuters
That tepid faith transformed into confidence when the US government made a rare $9 billion investment in the company — albeit funds Intel was supposed to get anyway from the Biden-era CHIPS Act — following Tan’s tiff with President Trump over the CEO’s business ties to China.
Onshoring semiconductor manufacturing has been a focus of the US government since the pandemic highlighted the risk of a tech supply chain reliant on Taiwan. Escalating tensions with China, including the threat of a Taiwan invasion, have further intensified the sense of urgency.
“Semiconductors are not only economically important, they’re actually important from a national security perspective,” Technalysis analyst Bob O’Donnell told Yahoo Finance. “Intel has by far the largest infrastructure in place as a true, real American company.”
Many critics believe the broader US turn toward state capitalism under Trump, exemplified by the Intel investment, raises questions about national security and the government’s conflicting interests. But analysts say the US government’s 10% stake in Intel could lead to various positive outcomes for the company, such as Intel having a say in trade policy that affects semiconductors. More importantly, the US could step in to incentivize or force a major company like Apple to use the chipmaker’s foundry.
A $2 billion investment from SoftBank and $5 billion from Nvidia further boosted investor sentiment on Intel stock. The cash infusion helped stem the company’s steep losses as it figures out a path forward. Notably, though, the Nvidia deal didn’t include an agreement for Intel’s foundry business to manufacture the AI giant’s chips.
Intel’s biggest potential customers for its foundry business — Nvidia, Apple (AAPL), and Qualcomm (QCOM) — are also, to some degree, competitors of its products arm and have longstanding relationships with TSMC. Not to mention, TSMC is building $165 billion worth of manufacturing capacity in the US, diminishing the geopolitical argument for those companies to use Intel to produce their chips.
Intel’s stock is up 86% for the year, helped by news of a new CEO and the US government’s 10% stake in the company. (Justin Sullivan/Getty Images) ·Justin Sullivan via Getty Images
To win those customers, Intel will need to prove that its latest generation manufacturing processes are up to snuff. The chipmaker’s 18A process, a massive technological feat initially marketed to outside customers, is now being used primarily to make Intel’s own products. Whether those products — Intel’s upcoming Panther Lake chips for PCs and Clearwater Forest chips for data centers — succeed could help convince companies to use its next-generation processes called 18AP and 14A, analysts said.
Already, rumors have circulated that Apple could use Intel’s manufacturing, specifically its 18AP process, for its lowest-end computer chips.
Intel has 12 to 18 months to secure a big external customer for 14A in order for that process to continue as planned, BNB Paribas analyst David O’Connor estimated.
He called the process “the crux of Intel being successful on the foundry business or not, or potentially even exiting manufacturing long term.”
“Everything hinges on 14A and the success of that,” O’Connor said.
Other analysts gave longer timelines for when Intel would see a turnaround.
Bernstein analyst Stacy Rasgon said, “It took 10 years to break it. Why would it take less than 10 years to fix it?”
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Laura Bratton is a reporter for Yahoo Finance. Follow her on Bluesky @laurabratton.bsky.social. Email her at laura.bratton@yahooinc.com.
