Intel's Rally Loses Momentum: Foundry Losses and Apple Deal Limits Overshadow McLaren Partnership and 18A Gains

Intel shares retreat 11% after 180% rally, as foundry unit posts $2.4B loss and Apple deal details emerge. 18A yields beat forecasts, but analysts cautious.

Intel stock hit the brakes this week after a blistering rally that had pushed shares up nearly 180% since the start of the year. The chipmaker closed at €93.71 on Friday, shedding roughly 11% over the past seven days as profit-taking set in. The pullback came despite a flurry of corporate developments — including a high-profile return to Formula 1 — that had earlier fueled investor enthusiasm.

The company's renewed motorsports presence after a 17-year hiatus hands McLaren a suite of processors for aerodynamic simulations and real-time race data processing at the track. The move puts Intel in direct competition with archrival AMD, which has powered Mercedes-AMG's cars for the past six years. For Intel, the partnership is about more than branding; it mirrors the broader battle for server and data center supremacy.

Under the hood, however, the foundry business continues to bleed cash. The unit posted an operating loss of $2.4 billion in the first quarter of 2026, underscoring the heavy cost of CEO Lip-Bu Tan's turnaround efforts. Intel bought back the remaining 49% stake in its Irish Fab 34 from Apollo-managed funds in April for $14.2 billion, financed through cash and fresh debt — a move designed to tighten control over manufacturing capacity.

The much-touted Apple foundry deal, hailed as a political milestone, is proving more nuanced than initial headlines suggested. According to analyst Ming-Chi Kuo, roughly 80% of the order volume targets iPhone chips, with the agreement focused primarily on older chip generations. First tests are underway this year, but mass production isn't expected until 2027 and 2028. Bank of America warns that breakeven for the foundry segment could slip by as much as two years. Still, if Intel captures a quarter of Apple's overall volume, the contribution could reach $10 billion in annual revenue by the end of the decade.

Analysts are split on where the stock goes from here. Deutsche Bank raised its price target twice in three weeks to $100, albeit retaining a neutral "hold" rating. Bank of America maintains an underweight stance, flagging potential buyer exhaustion and uncertain enterprise IT budgets. KeyBanc has also sounded a cautious note.

On the technology side, progress is accelerating. Intel’s advanced 18A process is delivering production yields that beat internal forecasts. CFO David Zinsner expects the company to hit its year-end yield targets by mid-2026 — earlier than planned. Better yields mean more usable chips per wafer, lower unit costs, and fatter margins, a critical step for the foundry's path to profitability.

All eyes now turn to Monday, when CEO Lip-Bu Tan takes the stage at J.P. Morgan’s technology conference. Investors will press for concrete details on the scale of the Apple partnership and utilization rates at the new Irish and U.S. factories. The stock sits roughly 15% below its recent all-time high, and the answers Tan provides could determine whether the current pullback is a buying opportunity or the start of a deeper correction. For the second quarter, Intel has guided revenue in the range of $13.8 billion to $14.8 billion — a number that, if beat, would quickly shift the narrative back in the bulls' favor.