Intel’s Stock Surge Faces a Reality Check

Intel US4581401001

Intel's equity has been one of the standout performers in 2025, with its share price climbing approximately 79% since the start of the year to reach $36.20. Chief Executive Lip-Bu Tan has characterized this period as a "turning point" for the semiconductor giant. However, this impressive rally is now confronting significant doubts, driven by technical setbacks in its pivotal foundry division. The critical question for the market is whether Intel can maintain this momentum.

A striking divergence in sentiment has emerged among major market participants. On one side, institutional investors have been aggressively accumulating shares. Recent filings for the third quarter of 2025 reveal substantial buying activity:
* Cwm LLC boosted its stake by 97%, bringing its holdings to 960,710 shares.
* Pacer Advisors Inc. increased its position by 19.3% to nearly 960,000 shares.
* West Tower Group LLC established a new position, purchasing 24,300 shares.

This activity suggests that professional money managers are betting on a continued corporate recovery. Conversely, the broader analyst community remains hesitant. The consensus recommendation currently leans toward "Hold" or "Reduce," with an average price target of $34.84—slightly below the current trading level. Nonetheless, a few firms are notably more bullish; Wells Fargo has set a target of $45, while Tigress Financial sees potential for the stock to reach $52.

Foundry Ambitions Hit a Technical Snag

At the core of Intel's revival strategy is its ambitious push into the contract chip manufacturing business, known as the foundry segment. This initiative has recently encountered a obstacle. According to a Reuters report, Nvidia has paused its testing of Intel's advanced 18A manufacturing process. This particular technology node is considered essential for Intel to close the competitive gap with industry leader TSMC.

Despite this immediate technical challenge, the strategic partnership with Nvidia retains its long-term significance. Nvidia has committed a $5 billion investment in Intel, a collaboration that received regulatory antitrust approval on December 18, 2025. This is further bolstered by a $2 billion investment from SoftBank, executed at an entry price of $23 per share. The substantial financial backing from these major technology players underscores a belief in Intel's long-term roadmap, even as short-term technical hurdles are addressed.

Solid Earnings Met with Cautious Guidance

Intel's recent financial performance demonstrated strength. For Q3 2025, the company reported revenue of $13.65 billion and earnings per share of $0.23, surpassing analyst estimates which had projected approximately $13.1 billion in revenue.

Looking ahead, management has adopted a more conservative stance for the fourth quarter. The company issued revenue guidance in a range of $12.8 billion to $13.8 billion, with adjusted EPS expected to be only $0.08. This projected decline in profitability is attributed to the substantial capital expenditures required to expand manufacturing capacity and compete effectively with rivals like TSMC.

A Pivotal Moment for the Chipmaker

Investors are now focused on a central issue: whether the paused testing with Nvidia represents a temporary delay or a more fundamental technological barrier. With the stock trading above the average analyst target yet attracting strong institutional interest, share price volatility is likely to remain elevated. The coming weeks and months will be decisive in revealing if Intel can successfully navigate these technical challenges and if CEO Tan's proclaimed "turning point" truly marks the beginning of a sustained growth trajectory.