Intel's High-Wire Act: Foundry Losses, AI Startup Talks, and a $14.2 Billion Apollo Buyback

Intel repurchases Apollo’s Irish fab stake for $14.2B, eyes Tenstorrent and SambaNova AI deals, while foundry losses deepen despite revenue beat.

A share price that has more than sextupled in twelve months — from €16.69 to north of €100 — tells only part of Intel’s story. Behind the rally lies a company engaged in a complex balancing act: aggressive capital investments, an ambitious acquisition strategy, and a deeply money-losing foundry business that it is betting everything on.

Reclaiming Control of Irish Production

Intel has agreed to repurchase Apollo Global Management’s minority stake in its Irish fabrication plant for $14.2 billion. The move is designed to give the chipmaker full ownership and operational control over a critical manufacturing hub. Management expects the transaction to become accretive to earnings per share from 2027 onward. The buyback underscores the scale of Intel’s commitment to vertical integration as it pours capital into next-generation process nodes.

Two Potential Mega-Deals on the Table

Alongside the Apollo buyback, Intel is reportedly in parallel negotiations to acquire two high-profile AI startups. The first is Tenstorrent, a maker of AI accelerators led by legendary chip architect Jim Keller. The company, valued at over $5 billion, has hired investment banks to explore a sale. Intel sees Tenstorrent’s RISC-V-based technology as a lever to close the gap with Nvidia and AMD in the AI accelerator market.

The second target is SambaNova, a specialist in AI infrastructure. In a twist, Intel’s CEO Lip-Bu Tan also serves as chairman of SambaNova — a relationship that adds an unusual dynamic to the talks. SambaNova was worth as much as $50 billion in 2021 but has seen its valuation collapse to around $24 billion in the eyes of investors such as BlackRock. Current discussions reportedly center on a price well below $5 billion. If either or both deals materialize, they would mark a dramatic acceleration of Intel’s AI push.

Financial Reality: Revenue Up, Earnings Still Deep in the Red

The optimism surrounding Intel’s strategic moves is not matched by its income statement — at least not yet. In the first quarter of 2026, the company posted revenue of $13.6 billion. Adjusted earnings per share came in at $0.29, crushing the consensus estimate of $0.01 by a staggering 2,800%. The data center and AI segment grew 22% year-over-year to $5.05 billion.

Yet on a GAAP basis, Intel reported a net loss of $3.73 billion. The foundry division alone contributed an operating loss of $2.4 billion, a direct consequence of the massive spending required to build out U.S. fabrication capacity under the CHIPS Act. For the current quarter, Intel guided revenue in a range of $13.8 billion to $14.8 billion.

18A Node Gains Traction — Xeon 6+ Nears Launch

While the financial picture is mixed, progress on the manufacturing front is tangible. CEO Lip-Bu Tan confirmed that the production yield on the 18A process node is improving by 7% to 8% each month. That trajectory matters because Intel plans to take on TSMC directly with the follow-on 14A node.

Mass production of the Xeon 6+ processors — codenamed “Clearwater Forest” — has begun. Based on the 18A node, the chips deliver 38% less rack power consumption and a more than 60% improvement in performance per watt versus the prior generation. Commercial availability is slated for the first half of 2026.

Eroding Server Share and a Rich Valuation

Despite those advances, Intel continues to lose ground in the server CPU market. AMD and Arm-based rivals are steadily eating into its once-dominant position. The company does not expect its foundry business to reach breakeven for at least three more years.

The contrast between current earnings and the stock’s valuation is stark. At approximately €102, the shares trade at a price-to-earnings multiple of 156, leaving little room for execution stumbles. Analyst opinion reflects the uncertainty:

• Citi rates Intel a “Buy” with a $130 target.
• 24/7 Wall St. holds a neutral stance at $101.40.
• Bank of America is more cautious with an “Underperform” rating and $96 target.

Insider Sale Adds Cautionary Note

Investors also noted that Intel’s chief legal officer sold roughly 40,000 shares at around $100 each in early May. While insider transactions are routine, the timing and size of the sale — in the midst of a historic rally — have raised some eyebrows.

Intel’s turnaround narrative rests on a foundation of genuine manufacturing progress and ambitious M&A. Whether a valuation of more than 150 times earnings is sustainable will depend on how quickly the foundry scales, whether the AI acquisitions close — and whether they deliver on their promise.