Intel’s stock took another leg lower on Monday, sliding 2.26 percent to €91.59, as the glow from a whisper of an Apple manufacturing pact faded and investors refocused on the Foundry division’s staggering losses. The weekly deficit now stands at 14.72 percent, chipping away at a rally that had turned Intel into one of the market’s most spectacular—and most fragile—stories.
Since plumbing its spring low on March 30, the chipmaker had more than tripled, adding over $440 billion in market capitalization. Short sellers, according to S3 Partners, sat on paper losses exceeding $12 billion during that surge. Yet the bears are creeping back: short interest has climbed to near its highest level in the past year, leaving the stock vulnerable to violent swings when momentum traders decide to take profits.
Foundry Bleeds as 18A Progress Tries to Catch Up
At the heart of the skepticism is Intel Foundry, the manufacturing unit that posted an operating loss of $2.4 billion on revenue of just $5.4 billion. That is not a side issue—it is a gaping hole that the rest of the company must patch. Much of the red ink stems from the costly ramp of the 18A process, where technical feasibility is running ahead of financial viability. Expensive wafers are squeezing margins, and the market is watching nervously for signs that costs will come down before the next leg of spending kicks in.
There is genuine progress behind the numbers. Chief Financial Officer David Zinsner told analysts that defect densities on 18A are tracking ahead of internal schedules, and the yield targets originally set for year-end 2026 could be hit as early as mid-2026. The first client processor on 18A, Panther Lake, is in production at Fab 52 in Arizona, while the Xeon 6+ server chip, code-named Clearwater Forest, is slated for the first half of 2026.
Apple Deal: Ambitious but Unconfirmed
The stock’s biggest jolt in recent weeks came from reports that Intel had struck a preliminary agreement to manufacture chips for Apple. The news drove a 15 percent single-day pop. Yet neither company has confirmed the scope, and details remain maddeningly vague. Analyst Ming-Chi Kuo pegged the initial focus on the iPhone A21 chip, with volumes starting small, scaling through 2028, and then tapering. An annual run rate of 15 million to 20 million units for entry-level M-series processors used in MacBook Air and iPad Pro has been floated, but the financial and technical specifics are still unverified.
Should investors sell immediately? Or is it worth buying Intel?
For Intel, landing an external marquee customer like Apple would lend credibility to the whole Foundry narrative. So far, outside foundry revenue stood at a paltry $174 million in the first quarter—a number that must jump meaningfully before investors can declare the strategy a success.
Operational Beat Masked by Cash Burn
Intel’s first-quarter numbers were genuinely encouraging. Group revenue of $13.6 billion came in $1.4 billion above the midpoint of the company’s own forecast, and adjusted earnings per share hit $0.29 versus the roughly breakeven level that had been guided. The free cash flow picture, however, was ugly: negative $2.54 billion, as capital spending on new fabs and process equipment accelerates.
For the second quarter, Intel is targeting revenue of $13.8 billion to $14.8 billion and adjusted EPS of $0.20. The company still expects the Foundry unit to break even by 2027, a timeline that relies on a pipeline of customers that includes Amazon Web Services (custom Xeon chips and AI interconnect components), Microsoft (the Maia 2 AI accelerator for Azure), Google (Xeon-based cloud infrastructure), SK Hynix (EMIB packaging for HBM integration), Tesla, and the U.S. government.
Valuation Leaves No Margin for Error
The market’s anxiety is not just about the income statement; it is also about the price tag. Intel currently trades at roughly 100 times forward twelve-month earnings, a multiple that towers over its own history and dwarfs Nvidia’s roughly 24 times. Even with analysts nudging earnings estimates higher, the consensus price target stands at about $85—well below where the stock has been trading. That gap leaves the shares acutely exposed to any operational stumble.
The next major checkpoint comes with the second-quarter report, when the market will judge whether Intel can hold its revenue band and, more critically, demonstrate a credible path to shrinking the Foundry losses even as 18A ramps. Until then, the Apple fantasy and the 18A reality will remain locked in a contest for the stock’s direction.
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