Intel’s Foundry Ambitions Face Scrutiny After Nvidia Pauses Key Collaboration

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Intel's stock has been one of the standout performers of 2025, having surged more than 80% since the start of the year. However, a recent development has introduced a note of caution as the year draws to a close. Reports indicate that Nvidia has halted testing of Intel's most advanced 18A manufacturing node, casting a shadow over the chipmaker's foundry strategy. While CEO Lip-Bu Tan has called this year a "decisive turning point," the latest news presents a significant challenge.

The market reaction was swift. Upon the news breaking, Intel's equity declined by approximately five percent. The shares were trading near $36 on Friday. This represents a substantial recovery from an April low of $16.61 but remains well below the December peak around $44. The core issue dampening investor sentiment is the paused collaboration on 18A fabrication, which tempers expectations that Intel could rapidly catch up to industry leader TSMC.

This setback is particularly notable given a major strategic win for Intel earlier this year. Nvidia committed $5 billion to purchase Intel shares and entered a partnership agreement for future products. The current situation reveals that the manufacturing cooperation is proving more complex than initially anticipated.

Interestingly, the product development alliance between the two firms appears intact. Details emerged over the weekend regarding a new laptop chip, reportedly named "Serpent Lake," designed to combine Intel's Titan-Lake CPU with Nvidia's RTX Rubin graphics. This suggests the broader technological partnership continues despite hurdles in the foundry segment.

Lofty Valuation Demands Flawless Execution

Intel's market capitalization now stands at roughly $173 billion, reflecting its impressive journey this year. Yet, the valuation remains demanding, with a price-to-earnings ratio exceeding 3,400. This premium is predicated on the successful and timely rollout of its next-generation 14A and 18A process nodes.

Market analysts largely maintain "Hold" ratings on the stock. They acknowledge the foundational support provided by $8.9 billion in U.S. government grants but continue to highlight execution risks. Compared to rivals like AMD and especially Nvidia, which dominates the AI accelerator market, Intel still has to prove it can successfully execute its comeback plan.

Upcoming Quarterly Report Serves as Key Catalyst

The next critical milestone for Intel is the release of its quarterly financial results, scheduled for January 22, 2026. In the interim, the $36 share price level is likely to serve as a key technical benchmark. A sustained break below this support could trigger a deeper correction if concrete progress on 18A yield rates is not demonstrated. With volume production slated for 2026, adherence to this timeline will be a primary driver of the stock's future trajectory.