Intel Shares Surge on AMD Foundry Talks, Extending Rally
Chipmaker's stock has gained over 50% in the past month as its turnaround strategy and foundry ambitions gain traction.
Intel (INTC) shares jumped more than 7% on Wednesday, extending a powerful month-long rally that has seen the chipmaker’s stock soar by over 50%. The latest surge was fueled by to become a customer for its manufacturing services, a significant development in CEO Pat Gelsinger’s ambitious turnaround plan.
The stock closed at $35.94, with trading volume at 1.8 times its daily average. This latest move is part of a dramatic recovery for Intel, which has seen its share price nearly double since hitting a low of $17.67 earlier in the year. The rally underscores growing investor confidence in Intel’s strategy to reinvent itself as a major player in the foundry business, manufacturing chips for other companies, even its competitors.
The potential partnership with AMD is a major validation of Intel Foundry Services (IFS), a cornerstone of Gelsinger's strategy to reclaim technological leadership in the semiconductor industry. This news follows a similar , signaling a strategic shift where industry rivals are now looking to leverage Intel’s manufacturing capabilities.
Intel’s resurgence is also being bolstered by significant financial support, including an estimated $8.9 billion to $11.1 billion from the U.S. government through the CHIPS Act. The company has also secured a and a $5 billion investment from Nvidia, further strengthening its financial position to execute its costly and capital-intensive turnaround.
Despite the strong momentum, Wall Street analysts remain cautiously optimistic. The consensus rating for Intel is a , with price targets varying widely. Some analysts, like those at Sanford C. Bernstein, view the company as "fundamentally challenged" but are wary of betting against the stock due to positive headline risks. Others, like Deutsche Bank, have raised their price targets, reflecting a more positive outlook on the company's prospects.
Investors will be closely watching for further developments in Intel’s foundry business and its ability to execute on its ambitious manufacturing roadmap. The coming months will be critical in determining whether the recent rally is the start of a sustainable recovery for the semiconductor giant.