Intel stock surged nearly 16% on Tuesday after a Wall Street Journal report suggested that Broadcom and TSMC were considering potential bids for the renowned chipmaker. Broadcom is said to be eyeing Intel’s chip design businesses, while TSMC might seek a stake or full control of Intel’s manufacturing operations. No formal offers have been made yet, according to the report. However, Intel’s business has been showing encouraging signs of recovery. The company’s manufacturing processes, which are key to its foundry strategy, have hit important milestones, and its newest chips have received positive reviews. Additionally, U.S. government policies favor domestic manufacturers like Intel, raising the question: Is this really the right time to sell?
18A Process Nodes Show Promise
Intel has made substantial investments in its U.S.-based foundry business over recent years. Despite the unit losing nearly $13 billion last year, Intel may be on the brink of a turnaround. The Intel 3 process node has been in mass production for several months, powering Xeon 6 data center chips. Meanwhile, the latest Intel 18A process is being sampled by laptop manufacturers. Intel has previously stated that the 18A process could help it regain “process leadership,” meaning it would have the most advanced semiconductor manufacturing technology after trailing behind TSMC and Samsung for years. Intel’s process holds key advantages. While both Intel 18A and TSMC’s N2 process use gate-all-around transistors, Intel’s additional innovation—backside power delivery—enhances efficiency and performance. Confidence in Intel’s technology is also rising, with Microsoft and Amazon contracting Intel to fabricate some of their custom chips, including AI accelerators, a trend that could continue. For investors seeking a more stable option than a single stock, consider the High Quality portfolio, which has outperformed the S&P and delivered over 91% returns since its inception.
Trump’s U.S. Manufacturing Push
Former President Donald Trump has been a strong proponent of strengthening U.S. manufacturing, which could benefit Intel given its significant domestic fabrication capacity. The current administration also aims to ensure AI chips are both designed and manufactured in the U.S. to safeguard American intellectual property. This policy direction could lead to regulatory support, such as tariffs or incentives, encouraging more companies to source their chips from Intel rather than foreign foundries. By handing over control to TSMC, Intel shareholders could risk missing out on this potential upside. See how Trump and new manufacturing processes are boosting Intel stock.
Positive Reviews For Latest Chips
Intel’s newest processors are receiving strong reviews. Initial benchmarks from PassMark indicate that Intel’s Arrow Lake-based Core Ultra 9 chip outperforms AMD’s Ryzen 9 processor by approximately 7% in CPU performance tests. It is also 34% faster than its predecessor, the i9-14900HX, with a 9% improvement in single-thread performance. Unlike Intel’s AI-focused Lunar Lake chips, these new processors are designed to maximize raw computing power for intensive productivity and creative tasks. This launch arrives at a strategic moment—over the past two years, companies have focused heavily on GPUs to support AI initiatives while reducing traditional CPU investments. As CPU spending rebounds, Intel may be well-positioned to regain market share.
Intel stock’s performance over the past four years has been highly volatile compared to the S&P 500. The stock returned 6% in 2021, -47% in 2022, 95% in 2023, and -60% in 2024. By contrast, the High Quality Portfolio has shown more stability while delivering superior returns. Why? These stocks tend to offer better performance with lower volatility, as demonstrated in HQ Portfolio performance metrics.
For long-term Intel shareholders who have weathered years of underperformance and heavy investments in the foundry business, this may not be the best time to exit. Transferring manufacturing to TSMC could mean missing out on a potential recovery, particularly as the CPU market shows signs of stabilization. Intel stock currently trades at about $27 per share, or just over 22 times 2025 consensus earnings—a valuation that appears reasonable. Our estimate for Intel’s fair value is also around $27 per share. For a deeper analysis, see Intel’s valuation.
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