Intel's Rally Hits a Speed Bump: McLaren Branding and Apple Foundry Win Face Profit-Taking and Server Share Losses

Intel shares fall 5.75% after a 178.86% YTD surge, as investors balance a McLaren partnership and Apple foundry win against server market share losses and valuation concerns.

Investors who rode Intel's meteoric rise this year took some chips off the table on Friday, sending the stock down 5.75% to €93.71. The weekly loss of 11.54% snaps a staggering run that still leaves the shares up 72.45% over the past 30 days and 178.86% since January 1. Two big narrative drivers – a splashy McLaren Racing partnership and fresh details on the Apple foundry deal – are now being weighed against stubborn headwinds in the server market and questions about whether the valuation has gotten ahead of itself.

Intel's technology is heading to the racetrack. The chipmaker announced a multi-year agreement to become the official computing partner of McLaren Racing across its Formula 1, IndyCar, and F1 Sim Racing programs. Intel will deploy Xeon and Core Ultra processors for computational fluid dynamics, aerodynamic analysis, vehicle simulation, and real-time race strategy – all linking the McLaren Technology Centre in Woking with pit garages around the world. The Intel logo will appear on McLaren's F1 cars beginning at the Montreal Grand Prix this weekend, while Arrow McLaren's IndyCar fleet will sport the branding at the Freedom 250 in Washington and next year's Indy 500.

The deal is Intel's latest bid to showcase high-performance computing and AI in an extreme, data-driven environment. But on Wall Street, the question is whether brand visibility alone can justify a stock that now trades well above its intrinsic value, according to one recent assessment. The tension between a compelling technology story and the price the market is asking has become the central conflict for Intel shares.

Meanwhile, analysts are digging deeper into the well-telegraphed Apple foundry win. Ming-Chi Kuo of TF International estimates that roughly 80% of the current Apple orders are for iPhone chips – specifically the A21. Intel is expected to manufacture older-generation chips for iPhones, iPads, and Macs, though mass production timelines remain unspecified and suppliers have yet to receive concrete schedules. Internally, Intel is targeting a stable yield above 50% by 2027. Kuo described the deal as a once-in-a-lifetime opportunity for the company.

On the manufacturing front, Intel is making progress. The yield on its cutting-edge 18A process is running ahead of internal forecasts. CFO David Zinsner expects to hit full-year targets by the middle of 2026. Better yields per wafer should help bring down costs and boost margins – a crucial metric as Intel fights to regain credibility in the foundry business.

But the server market tells a different story. UBS analyst Timothy Arcuri notes that Intel continues to lose ground to AMD and Arm. The company’s share of server processors slipped to just under 55% in the first quarter, while AMD climbed above 27%. That erosion underscores the competitive pressure Intel faces even as its turnaround narrative gains traction.

At the annual shareholder meeting, management secured a show of support. All 11 board candidates were elected, and activist proposals – including calls for stricter China risk disclosures and a permanent separation of the board chair and CEO roles – were defeated. The board chairmanship will pass from Frank Yeary to Craig Barratt as planned, giving CEO Lip-Bu Tan a stable foundation to execute his strategy.

Tan will address investors at the J.P. Morgan Global Technology, Media and Communications Conference on May 19, followed by Zinsner’s appearance at the BofA Global Technology Conference on June 2. Both events will be closely watched for clarity on how Intel’s technology narrative aligns with its financial reality. Nvidia’s quarterly earnings on May 20 add another catalyst that typically sets the tone for the entire semiconductor sector.

For now, Intel’s stock sits just under 15% below its 52-week high. Friday’s profit-taking may be a healthy pause in a rally that has been nothing short of historic – but the road ahead is paved with both opportunity and risk.