Intel's Twin Tailwinds: Googlebook and Apple Foundry Deals Power a Rally That Defies the Red Ink

Intel shares triple after landing Google processor deal for laptops and Apple foundry contract, but a $4.3 billion GAAP net loss and costly turnaround weigh on the rally.

Intel has pulled off one of the most dramatic stock surges in recent memory, with shares more than tripling since the start of the year and short sellers nursing cumulative losses exceeding $12 billion. The stock closed at €102.68 in Frankfurt on Wednesday, capping a 200%-plus advance that included an 88% jump over the past 30 days alone. Yet beneath the euphoria lies a company still wrestling with deep losses and a costly transformation.

The rally has been fueled by two major customer wins. Google has tapped Intel as a processor supplier for its new "Googlebook" laptop line, scheduled for a fall 2026 launch. The devices will run on Intel’s "Wildcat Lake" Core 300-series chips, which carry a dedicated AI unit designed to complement Google’s Gemini model. Google Cloud is also adopting Intel Xeon processors for large-scale AI workloads. The partnership is not exclusive, however—Qualcomm and MediaTek are also supplying chips for the first generation.

An even bigger prize followed: a formal foundry contract with Apple. The M7 chip will be manufactured on Intel’s 18A-P process starting in late 2027, with smartphone chips on the 14A node expected by the end of 2028. Apple’s move is driven by a desire to reduce dependence on TSMC, amplified by US government pressure and supply-chain concerns. The Apple deal adds to a growing list of foundry commitments that include a $5 billion investment from Nvidia and $2 billion from SoftBank. Elon Musk is reportedly planning to use Intel’s 14A process for his "Terafab" project.

The financial reality behind these headlines remains stark. Intel reported a net loss of $3.7 billion for the first quarter, with restructuring costs taking a heavy toll. On a GAAP basis, that loss widened to $4.3 billion. Revenue climbed 7% to $13.6 billion, but the foundry division alone posted an operating loss of $2.4 billion on just $174 million of external sales. For the second quarter, management guided for revenue between $13.8 billion and $14.8 billion and non-GAAP earnings per share of $0.20.

The balance sheet offers some breathing room: cash reserves topped $17 billion, a buffer desperately needed as Intel simultaneously expands its own fabrication facilities and pours capital into new partnerships. On the manufacturing front, the 18A node has entered commercial production with yields ahead of schedule—a milestone given the company’s historical struggles with process technology.

Dan Niles of Niles Investment Management argues Intel is undervalued relative to AMD, citing the rise of "agentic AI" that shifts computational demand from GPUs toward CPUs. He sees the ratio of eight graphics chips to one main processor moving rapidly toward one-to-one. Separately, Intel is tackling the AI security bottleneck: a joint effort with Dell highlighted that up to 90% of AI projects stall because of security concerns, and Intel plans to embed post-quantum cryptography directly into its chip architecture by 2029.

Wall Street remains divided. Deutsche Bank praised growing interest in Intel’s foundry business but maintained a "Hold" rating as of May 12, warning that the stock’s rally has already priced in considerable optimism. Other targets range from $80 at RBC Capital to $124 at Mizuho Securities. Some analysts still prefer AMD for its steadier fundamentals while Intel’s foundry operations continue to bleed cash.

With annualized 30-day volatility above 91%, the stock remains a battleground. The next quarterly report will test whether revenue and earnings guidance can justify the current valuation—and whether short sellers face another round of punishment.