
Intel's Dual Gamble: AI Innovation Now, Foundry Fortunes Later?
[content-module:CompanyOverview|NASDAQ:INTC]
Intel Corporation (NASDAQ: INTC) continues pursuing a demanding dual strategy to revitalize its market standing and financial health. The company's stock price is hovering near $20.25 in early June 2025, reflecting a significant investor evaluation of its turnaround prospects. The company's turnaround strategy hinges on successfully balancing two core imperatives.
First, Intel must drive rapid innovation and capture immediate market share in artificial intelligence (AI)-powered client and data center products. Second, Intel must complete its current Foundry business undertaking and become a global player in contract chip manufacturing.
The effective management of these distinct yet interconnected ambitions is the most critical factor that could reshape Intel's market position and ultimately enhance shareholder value.
The AI Engine: Intel's Bid for Immediate Product Wins
Intel's immediate focus on integrating artificial intelligence across its key product lines is designed to generate quicker financial returns and demonstrate market leadership. Success in this arena could provide vital momentum and resources while its longer-term foundry ambitions continue to mature.
In the Client Computing Group (CCG), Intel is aggressively targeting the burgeoning AI PC market. Key initiatives include:
Product Pipeline: Leveraging its Core Ultra processors and advancing a roadmap that features Panther Lake, Lunar Lake, Arrow Lake, and newly outlined CPUs like Nova Lake-S/U, Wildcat Lake, and Bartlett Lake-S.
Market Target: A stated goal of shipping over 100 million AI PCs by the end of 2025.
Financial Potential: This AI PC push could increase Average Selling Prices (ASPs) and improve profit margins for the CCG segment, which recorded $7.6 billion in revenue in Q1 2025.
Within the Data Center and AI (DCAI) segment, Intel is also making strides:
Key Offerings: The rollout of new Xeon 6 processors and Gaudi 3 AI accelerators aims to strengthen Intel's competitive position against rivals in the high-growth AI infrastructure market.
Performance Metrics: The DCAI segment showed positive momentum with $4.1 billion in revenue in Q1 2025, an 8% year-over-year increase.
Strong market adoption and financial performance from these AI-centric products could offer significant near-term catalysts for Intel's stock, potentially alleviating some investor concerns stemming from the high costs associated with its foundry development strategy.
Intel's Foundry Bet: High Stakes, High Rewards
Parallel to its AI product drive, Intel is pursuing the transformative, multi-year goal of establishing Intel Foundry as a world-leading contract manufacturer, a cornerstone of its IDM 2.0 strategy. This endeavor is crucial for Intel's long-term competitive positioning but comes with substantial financial commitments and execution risks.
Key aspects of this long-term strategy include:
Technological Reclamation: The "five nodes in four years" roadmap is central to regaining leadership in the manufacturing process. The Intel 18A node, which entered risk production in April 2025 and features advanced RibbonFET transistors and PowerVia backside power delivery, is a critical test. The new Panther Lake CPUs are slated to be its first products, and their release is anticipated in the second half of 2025.
Building Credibility and Business: Securing commitments from major external customers is paramount. Microsoft (NASDAQ: MSFT) has already committed to using Intel 18A for a future chip design, and a partnership with Amazon Web Services covers Intel 3 and 18A nodes. These are vital early endorsements.
The Financial Hurdle: The foundry segment currently operates at a significant loss, reporting a $2.3 billion operating deficit in Q1 2025. Intel is targeting break-even status for this division by 2027, a crucial milestone given the $18 billion gross capital expenditure target for 2025. Furthermore, Intel Foundry must "earn" business from Intel's product divisions, a dynamic intended to ensure its competitiveness against external foundries like TSMC.
This foundry venture's perceived risks and eventual payoff heavily influence investor sentiment towards Intel's stock. Demonstrable progress in technology, customer acquisition, and a clear path to profitability are essential long-term drivers for the stock.
Gauging Risks and Rewards in Intel's Dual Strategy
[content-module:Forecast|NASDAQ:INTC]
Intel's dual strategy, while ambitious, presents a compelling risk/reward scenario for investors. With the stock trading near its 52-week low and a cautious analyst consensus, much of the market's skepticism appears to be priced in.
This environment potentially offers an attractive entry point for long-term investors, particularly considering upcoming catalysts such as the Panther Lake CPU launch in late 2025.
While execution risks persist in product innovation and foundry development, the potential upside is considerable. Intel's strategic push into high-growth AI segments aims to bolster its near-term financial performance. These gains can, in turn, support the capital-intensive build-out of Intel Foundry, which benefits from government incentives and a global need for diversified chip manufacturing.
This potential is supported by Intel's sizable asset base, reflected in a price-to-book ratio (P/B) of approximately 0.83.
Investors should monitor key indicators for positive momentum:
Stronger AI product sales and margin improvements.
New high-volume foundry customer wins and clear progress on the Intel 18A manufacturing ramp.
A steady climb in overall gross margins from the current Q2 non-GAAP guidance of ~36.5% towards the company's +50% target.
Successfully hitting these markers could significantly shift the current market narrative, suggesting Intel has the resources and strategy to achieve its objectives and deliver notable long-term shareholder value.
Intel's Need for Tangible Results
[content-module:TradingView|NASDAQ:INTC]
Intel's journey to redefine its market position and deliver enhanced shareholder value is intricately tied to its ability to execute its dual mandate flawlessly.
Near-term successes in the AI PC and data center markets, driven by compelling product innovation, are essential for immediate financial health. They build confidence and provide the resources needed for the longer, more arduous path of establishing a globally competitive and profitable foundry business.
Ultimately, consistent and tangible results across both these strategic fronts will be the decisive factor in Intel's turnaround and its ability to reward patient investors.
Where Should You Invest $1,000 Right Now?
Before you make your next trade, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.
Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.
They believe these five stocks are the five best companies for investors to buy now...
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles

Globe and Mail
25 minutes ago
- Globe and Mail
What Canadian investors need to know about the Trump tax bill
If the first six months are any indication, the reign of U.S. President Donald Trump is going to be a rough one for Canadian investors. First, the stock market plunged earlier this spring as Mr. Trump's tariffs started a global trade war. Stocks have mostly recovered, but a new threat has emerged in the form of legislation that would allow Washington to ramp up the taxation of Canadians holding U.S. stocks. The One Big Beautiful Bill Act is not yet law – it passed in the U.S. House of Representatives by a single vote but must still pass in the Senate – and may change in scope. For now, it has the potential to more than double the tax applied to dividends from U.S. companies received by Canadian investors and corporations. The ultimate effect of the tax changes could be costly in total but perhaps not so bad on an individual basis. Regardless, it's too early to make changes in your investment portfolio. 'Currently, we're not making any moves, and I'm recommending everyone do the same thing and just wait to see what the information actually is,' said Justin Bender, a portfolio manager at PWL Capital. 'Then we can assess and see if there's any changes necessary.' Wealth managers brace for proposed U.S. tax bill's impacts on Canadian clients What's in Trump's big budget bill? From cuts to taxes and Medicaid, here's what to know Ultimately, Section 899 of the legislation could introduce a withholding tax of 20 to 50 per cent of dividends received by Canadians. There are estimates that this extra tax could cost individual investors, pension funds and others billions of dollars. The point of Section 899 is to give the U.S. a weapon to punish what it considers to be unfair taxes in other countries. Thought to be a target is our digital services tax, which mainly applies to U.S. tech giants generating revenue in Canada. Estimates from Mr. Bender show a worst-case additional drag on returns of 0.46 percentage points from U.S. stocks and U.S. equity exchange-traded funds when the higher withholding tax is fully phased in over four years. Think of this cost as being in addition to the management expense ratio of an ETF or mutual fund. If your return from a U.S. equity fund was a net 10 per cent with the management expense ratio (MER) included, then a higher withholding tax could ultimately leave you with as little as 9.54 per cent. Note that fund returns are always published on a net basis, with the MER included and, where applicable, foreign withholding taxes already deducted. Under existing U.S. tax law, there is a base withholding tax rate of 30 per cent for foreign investors holding U.S. stocks. A Canada-U.S. tax treaty generally reduces this rate to 15 per cent. No withholding tax applies to U.S. dividends paid into registered retirement savings plans and registered retirement income funds by U.S.-listed stocks and ETFs. There's no clear sense of whether this exemption would continue to apply under Section 899. In a non-registered account, you can offset the 15-per-cent withholding tax by claiming an offsetting foreign tax credit. In a TFSA, registered education savings plan, first home savings account or registered disability savings plan, the withholding tax cannot be recovered; it is also non-recoverable in RRSPs and RRIFs if you hold a Canadian-listed U.S. equity ETF. Canadian investors have a massive level of exposure to U.S. stocks directly and through funds. About $60-billion is invested in just four TSX-listed ETFs that track the S&P 500 index. But investing in the S&P 500, and the even more tech-focused Nasdaq, is much more about growth than dividend income. The dividend yield on the S&P 500 right now is about 1.3 per cent, half the level of the yield on Canada's S&P/TSX composite index. 'It's very low, which is why this tax maybe isn't as much of an issue as people are making it out to be,' Mr. Bender said. 'Some extra withholding taxes are probably not going to blow up your financial plan.' Mr. Bender added that the impact is further diminished by the fact that most investors have diversified their U.S. exposure with bonds and Canadian stocks, plus international markets in many cases. Investors who use ETFs for exposure to U.S. stocks can buy funds listed on U.S. exchanges as well as those located in Canada. Among Canadian-listed funds, there are those that hold U.S. stocks directly and those that are effectively a wrapper for a U.S.-listed fund in the same corporate family. Mr. Bender said each of these three ETF types would be affected similarly by higher U.S. withholding taxes. Are you a young Canadian with money on your mind? To set yourself up for success and steer clear of costly mistakes, listen to our award-winning Stress Test podcast.


CTV News
30 minutes ago
- CTV News
U.S. stocks drift higher as trade talks start with China in hopes of avoiding a recession
NEW YORK — U.S. stocks are drifting higher on Monday as the world's two largest economies begin talks on trade that could help avoid a recession. The S&P 500 rose 0.3% in afternoon trading. The Dow Jones Industrial Average was rose 100 points, or 0.2%, as of 2:05 p.m. Eastern time, and the Nasdaq composite was 0.4% higher. Officials from the United States and China are meeting in London to talk about a range of different disputes that are separating them. The hope is that they can eventually reach a deal that will lower each's punishing level of tariffs against the other, which are currently on pause, so that the flow of everything from tiny tech gadgets to enormous machinery can continue. Hopes that President Donald Trump will lower his tariffs after reaching such trade deals with countries around the world have been among the main reasons the S&P 500 has rallied so furiously since dropping roughly 20% from its record two months ago. It's back within 2.1% of its all-time high, which was set in February, and it's higher than it was before Trump shocked financial markets with his wide-ranging tariff announcement on what he called 'Liberation Day.' This may be the shortest sell-off following a shock of heightened volatility on record, according Parag Thatte, Binky Chadha and other strategists at Deutsche Bank. Typically, stocks take around two months to bottom following a spike in volatility and then another four to five months to recover their losses. This time around, stocks have basically made a round trip in less than two months. But nothing is assured, of course, and that helped keep trading relatively quiet on Wall Street Monday. Warner Bros. Discovery fell 1.7% after saying it would split into two companies. One will get Warner Bros. Television, HBO Max and other studio brands, while the other will hold onto CNN, TNT Sports and other entertainment, sports and news television brands around the world, along with some digital products. IonQ rose 3.5% after the quantum computing and networking company said it agreed to buy Oxford Ionics for nearly $1.08 billion. All but $10 million of the purchase price will come from IonQ's stock, and the hope is that the combined company will benefit from its complementary parts to produce computers that can perform better than classical machines. Tesla, meanwhile, drifted following some sharp swings. The electric vehicle company tumbled last week as Elon Musk's relationship with Trump broke apart, and it rose 1.2% Monday. The frayed relationship could also end up damaging Musk's other companies that get contracts from the U.S. government, such as SpaceX. Rocket Lab, a space company that could pick up business at SpaceX's expense, rose 5.3%. In stock markets abroad, indexes were modestly lower in Europe after rising across much of Asia. Chinese markets climbed even though the government reported that exports slowed in May, growing 4.8% from a year earlier after jumping more than 8% in April. China also reported that consumer prices fell 0.1% in May from a year earlier, marking the fourth consecutive month of deflation. Stocks rallied 1.6% in Hong Kong and rose 0.4% in Shanghai. In the bond market, the yield on the 10-year Treasury eased to 4.47% from 4.51% late Friday. It fell after a survey by the Federal Reserve Bank of New York found that consumers' expectations for coming inflation eased a bit in May. That provides some relief for the Fed, which has been keeping its main interest rate steady as it waits to see how much Trump's tariffs will raise inflation and how much they will hurt the economy. Economists expect a report coming on Wednesday to show inflation across the country accelerated last month to 2.5% from 2.3%. ___ AP writer Jiang Junzhe contributed. By Stan Choe


Globe and Mail
an hour ago
- Globe and Mail
A $3.7 Billion Reason to Sell Plug Power Stock Now
Plug Power (PLUG), a prominent name in the clean energy sector, has found itself in increasingly stormy waters following a recent announcement by the U.S. Department of Energy (DOE). On May 30, the DOE revealed a sweeping cut of approximately $3.7 billion in grants allocated for clean energy projects, sending shockwaves through the sector. The DOE's decision represents a sharp policy reversal from former President Joe Biden's robust support for renewable energy initiatives. Although Plug was not directly affected, the move sparked broader concerns about the company's outlook, as significant funding it had been relying on was abruptly placed under review under President Donald Trump, with apparently diminishing chances of approval. In this article, we'll break down what the DOE's funding cuts mean for Plug Power, how the changing political landscape could derail its growth ambitions, and why investors may want to reconsider their exposure to this once high-flying clean energy stock. About Plug Power Stock Valued at a market cap of $1.05 billion, Plug Power (PLUG) is a notable player in the green hydrogen industry, specializing in hydrogen fuel cell technologies. The company is building a comprehensive green hydrogen ecosystem, spanning production, storage, delivery, and energy generation, to support its customers' business objectives and contribute to economy-wide decarbonization. Its offerings include the GenDrive fuel cell system for material handling vehicles such as forklifts, GenSure stationary fuel cells for grid support, and ProGen fuel cell engines designed for a range of applications. It also offers GenFuel, a comprehensive solution for hydrogen production, storage, and dispensing. Shares of the ailing hydrogen fuel cell product solutions provider have slumped 51.6% on a year-to-date basis. Plug Remains Under Pressure from U.S. Regulatory Challenges Clean energy stocks, including Plug Power, have taken a significant hit this year as the Trump administration targeted the sector with funding cuts, policy changes, and import restrictions. The latest move came on May 30, when the Energy Department (DOE) announced $3.7 billion in funding cuts for clean energy and climate initiatives, with a significant share of the canceled grants targeting carbon capture and sequestration projects. This represents a stark shift from the previous administration's policies, which pumped billions into the sector. The DOE stated that the decision followed findings that the projects 'failed to advance the energy needs of the American people, were not economically viable, and would not generate a positive return on investment of taxpayer dollars.' Of the 24 projects canceled in the move, 16 were awarded between Election Day and Trump's inauguration, the agency said in a statement. Bloomberg reported that the canceled awards included $331 million for Exxon Mobil (XOM) to replace natural gas (NGN25) with hydrogen at its Baytown, Texas, Olefins Plant; $170 million for Kraft Heinz (KHC) to pursue a range of clean energy projects; and $500 million for Heidelberg Materials (HDLMY) to develop a low-carbon cement initiative, according to a list provided by the DOE. Although Plug Power wasn't directly affected by this round of funding cuts, the move raises broader concerns for the company. Plug received a nearly $1.7 billion loan guarantee from the DOE in early January to support six zero- and low-carbon hydrogen production projects, but the Trump administration has since placed the loan under review, effectively putting it on hold. The latest developments increase the likelihood that the funding will be revoked, potentially further delaying Plug's path to profitability or even pushing the company toward bankruptcy. Plug stated that it was continuing to 'monitor the evolving landscape.' Moreover, the company recently requested shareholder approval for a reverse stock split and an increase in its authorized share count in a bid to stay afloat, as it now faces the risk of being delisted from the Nasdaq Exchange. 'Without an increase in the number of authorized shares... we may be constrained in our ability to address ongoing needs and pursue opportunities,' Plug warned in a letter to investors. 'There are going to be some companies that do fall away because they do not have strong fundamentals. But a lot of high-quality companies that do not receive the funding will not scale,' said Amy Duffuor, general partner at Azolla Ventures, a climate-focused venture capital investor. Potential Loss of Hydrogen Production Tax Credit Presents Major Headwind for PLUG The major threat to the company stems not from government funding cuts, but from Trump's tax-and-spending bill, which contains a provision to eliminate the generous 45V clean hydrogen production tax credit. The tax bill, which passed the House of Representatives along party lines in May with a 215-214 vote, is now under Senate consideration, with a vote on approval expected by August. If finalized, the elimination of the 45V credit would deal a significant blow to nearly all announced green hydrogen projects in the U.S. The legislation proposes ending 45V eligibility for any hydrogen projects that begin construction after Dec. 31, 2025, effectively stripping it of its long-term, broad-based impact. Under the current Inflation Reduction Act (IRA), the tax credit provides up to $3 per kilogram of hydrogen produced through 2033. Notably, the IRA's 45V tax credit spurred a 247% increase in planned U.S. hydrogen production capacity between Q2 2022 and Q4 2024, reaching 18.53 million tonnes annually. However, with Republicans aiming to roll back Biden-era clean energy policies, the bill's passage in the House represents a direct threat to the future of hydrogen development in the U.S. For Plug Power, the proposed expiration of the hydrogen production tax credit would significantly undermine its business plan, which relies on building a nationwide network of green hydrogen plants. The construction of new plants was planned to be funded by the DOE loan, but with the loan currently under review and its approval increasingly unlikely, the company is facing a double setback. Without new green hydrogen plants and the support of related production tax credits, the company's hydrogen fueling business is likely to continue incurring significant losses in the foreseeable future. Additionally, without tax credits, most third-party green hydrogen projects in the U.S. would likely be halted, further limiting Plug Power's ability to sell electrolyzers and liquefaction equipment in the domestic market. How Did Plug Power Perform in Q1? On May 12, Plug Power released its earnings results for the first quarter of 2025. The company's top line grew 11.1% year-over-year to $133.7 million, driven by higher electrolyzer deliveries, sustained demand in material handling, and continued deployments across its cryogenic platform. The result aligned with the company's guidance and exceeded Wall Street's consensus estimate by $1.88 million. The company's growth was supported by several milestones, including the expansion of its hydrogen production capacity to 40 tons per day across three operational plants. The momentum appeared to continue in Q2, as the company recently reported that its Woodbine, Georgia, hydrogen plant produced 300 metric tons of liquid hydrogen in April — the facility's highest monthly output to date. On the profitability front, PLUG narrowed its gross margin loss in Q1, supported by ongoing supply chain optimization, continued cost reductions, price hikes, and progress in scaling its hydrogen platform. With that, gross margin loss improved to -55% from -132% in the year-ago quarter. Still, during the Q1 earnings call, management revised its earlier forecast of reaching positive gross margins in Q4 2025 and is now aiming for breakeven by year-end. Meanwhile, PLUG's net loss per share stood at $0.21 in Q1, missing expectations by $0.02. Despite some progress, regulatory challenges are expected to heavily affect the company's path to profitability going forward. Now, let's shift focus to another major source of concern, which is liquidity. As of March 31, Plug held $295.8 million in cash and cash equivalents. After the quarter ended, the company secured an expensive debt facility of up to $525 million from its existing lender, Yorkville Advisors. Given the Q1 cash burn of $152.1 million — and assuming it remains at a similar or lower level in the coming quarters due to the cost-saving Project Quantum Leap initiative — PLUG's liquidity seems adequate for the rest of the year. Still, the outlook for next year remains uncertain, as Plug's low share price restricts its funding options, particularly its ability to pursue additional equity offerings. Looking ahead, management projects Q2 revenue to range between $140 million and $180 million, with improvements in gross margin and working capital performance anticipated throughout the rest of 2025. According to Wall Street estimates, the company's net loss is expected to narrow by 78% year-over-year to $0.59 per share for fiscal 2025, while revenue is projected to grow 16.69% year-over-year to $733.76 million. Notably, analysts currently expect that the company will remain unprofitable until fiscal 2030. Options Market Sentiment on PLUG Stock Examining the option chain for September 19, 2025, the $1.00 CALL option has a bid/ask spread of $0.23/$0.25, while the $1.00 PUT option shows a spread of $0.25/$0.30. Please note that this option strike price is the closest to the current stock price. Now, let's calculate the expected price movement based on the midpoint prices of these options: 0.2750 (1.00 put) + 0.2400 (1.00 call) = 0.5150/0.9692 = 53.1% Based on current pricing, the options market implies that PLUG stock could move approximately 53% from the $1.00 strike price by September's options expiration, utilizing the long straddle strategy. That would place the stock in a trading range of $0.46 to $1.48. Notably, put options at the $1.00 strike price outnumber call options by a ratio of 1.66 to 1, with 20,664 open puts compared to 12,462 open calls. This reflects a bearish sentiment, suggesting that options traders are betting on PLUG stock underperforming in the coming month, reinforcing the broader bearish case for the company. What Do Analysts Expect For PLUG Stock? Overall, Wall Street analysts remain cautious on Plug Power stock, as evidenced by the consensus 'Hold' rating. Out of the 23 analysts covering the stock, six recommend a 'Strong Buy,' 13 advise holding, and the remaining four have a more bearish outlook with a 'Strong Sell' rating.