Intel's Foundry Crossroads: Government Backing Bolsters a 460% Rally, but 18A Delays Threaten the Next Leg
Published on 07/09/2026 at 02:52 | Redaktion boerse-global.de
The US government now holds a 10% stake in Intel, and up to $8.5 billion in direct CHIPS Act grants are flowing toward its factories. Yet the narrative around the chipmaker has rarely been more fractured. The very same week that Intel broke ground on a new EUV photomask facility in Santa Clara, reports surfaced that its flagship 18A process may not reach profitable yields until late 2026 or even 2027 — news that sent the stock into a seven-day tailspin of nearly 16%.
The drop to €94.06 has erased roughly a quarter of the value from the 52-week high of €124.58 set on June 30. But zoom out: the shares still trade more than 460% above their 52-week low of €16.69, a rally that underscores just how much optimism has been baked into the stock. The tension between that multi-year surge and the persistent operational losses at Intel Foundry now dominates the conversation.
The Foundry Math: $2.4 Billion Losses on $174 Million in Outside Revenue
Intel's foundry ambition is a capital-intensive gamble of staggering proportions. Since 2021, the company has poured more than $100 billion into expanding global fabrication capacity, with Fab 52 in Chandler, Arizona, already running 18A production since October 2025. But the financial returns remain elusive: in the first quarter of 2026, Intel Foundry Services generated just $174 million in revenue from external customers, while its operating loss clocked in at $2.4 billion. The unit's accumulated losses since 2023 top $7 billion.
The core question is whether the 18A node can attract enough third-party orders to turn that division around. Microsoft and AWS have placed custom AI-chip orders using 18A — a vote of confidence — and the new Nova Lake desktop CPUs (up to 52 cores) are slated for late 2026. Meanwhile, Gaudi-3 AI accelerators are broadly available, and the Crescent Island data-center GPU is heading to test customers in the second half. Still, the gap between internal consumption and external foundry demand fuels skepticism that Intel's fabs will ever operate as a pure-play merchant business.
Should investors sell immediately? Or is it worth buying Intel?
Analysts Split: "Hold" Consensus Masks a $200 Bull Case
The analyst community reflects the same duality. Bank of America reaffirmed a Buy rating on June 23 with a $160 price target, and HSBC is the most bullish at $200, citing the long-term potential of the foundry business. Goldman Sachs and Cantor Fitzgerald both initiated coverage with Neutral ratings and $150 targets. Yet the consensus remains a "Hold," with an average target of just $88.63 — well below the current trading level. That divergence suggests the market is still pricing in significant execution risk.
Technically, the stock has deteriorated. The 14-day RSI sits at 41, neutral but tilting bearish, and Intel now trades about 8% below its 50-day moving average of €102.12. The longer-term picture is stronger: shares are 31% above the 100-day average and 78.84% above the 200-day average, and the golden cross formed in August 2025 remains intact.
The July 23 Earnings: A Pivot Point
All eyes are on Intel's second-quarter report, due after the bell on July 23. The numbers will be parsed for any acceleration in external foundry revenue and, more importantly, for concrete signs of progress on 18A yields. If the turnaround narrative gains hard evidence, the bull case — backed by billions in government support and early customer wins — could reassert itself. If the foundry losses continue to mount without a visible path to profitability, the stock's 460% run-up leaves little room for disappointment.
Intel at a turning point? This analysis reveals what investors need to know now.
For now, Intel dwells in a paradox: a company with state backing, a new campus, and marquee customer commitments, yet still bleeding cash in its most ambitious venture. The next quarterly earnings will either bridge that gap or widen it.
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