Intel's Apple Win and McLaren Sponsorship Fuel Narrative, but Server Share Erosion Dampens the Mood

Intel secures Apple chip deal and McLaren computing partnership, but investor skepticism mounts as stock drops 11.5% for the week and server CPU market share erodes to 54.9%.

Intel has delivered two headline-grabbing announcements in quick succession — a tentative chipmaking deal with Apple and a multi-year partnership with McLaren Racing — yet the stock closed the week lower for a second straight session. The contrast between the company's strategic momentum and market skepticism is sharpening.

The Apple pact, reported on May 15, marks a milestone for Intel's foundry ambitions. Apple is said to be using Intel's 18A-P process and Foveros packaging technology for entry-level processors in iPhones, iPads and Macs. More advanced chips are planned: an A21 for 2028 and an M7 as early as 2027. That matters because Intel's foundry unit posted an operating loss of $2.3 billion in the first quarter. Securing Apple — even for mid-range chips while TSMC keeps the high-end business — gives Intel external validation. The McLaren deal, announced ahead of the Montreal Grand Prix, will see Intel become the official computing partner for the Formula 1, IndyCar and Sim Racing teams. Xeon and Core Ultra processors will power aerodynamic simulations, real-time race strategy and vehicle modeling. The Intel logo will appear on cars starting this weekend.

Investors, however, aren't cheering. Intel shares closed Friday at €93.71, down 5.75 percent on the day and 11.54 percent for the week. That leaves the stock roughly 15 percent below its 52-week high of €109.88. A broader semiconductor sell-off didn't help: the Philadelphia Semiconductor Index dropped 4.1 percent, weighed by a looming Samsung strike and oil prices near $109 a barrel.

The shareholder meeting on May 13 added another layer of reassurance. All 11 directors were re-elected, executive compensation was approved with overwhelming support, and three shareholder proposals — including one to split the CEO and chair roles — were defeated. Around 79 percent of outstanding shares were voted, a high turnout that signals confidence in management's IDM 2.0 strategy.

Yet beneath the surface, Intel's competitive position in its core server CPU market is fraying. UBS data shows Intel's share fell to 54.9 percent in the first quarter, a drop of 370 basis points from the prior quarter. AMD climbed to 27.4 percent, while Arm-based processors now account for 17.7 percent. That erosion is one reason analysts remain split after a rally that has still delivered a 178.86 percent gain year-to-date. Among 41 analysts, the consensus is "Hold" with a price target of $77.38 — well below current levels. Mizuho raised its target to $124 on May 12, citing rising AI server demand, while Benchmark stuck at $105.

Earnings expectations for the second quarter are modest: Intel guides for EPS of $0.20. The company's next big test comes when CEO Lip-Bu Tan speaks at the J.P. Morgan Global Technology, Media and Communications Conference on May 19, followed by CFO David Zinsner at the BofA Global Technology Conference on June 2. The Apple deal and McLaren branding give Intel two strong stories to tell. But the market is now demanding proof that those stories can stop the server share slide and translate foundry wins into profits.