
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
4 hours ago
- Globe and Mail
Quebec's Hypertec announces $5-billion program to build European data centres
Quebec technology company Hypertec Inc. has announced a $5-billion program to build a series of data centres across Europe capable of powering two gigawatts of AI computing capacity. Hypertec is partnering on the project with Montreal-based 5C Group, which it largely owns, and Together AI of San Francisco. The group expects to roll out the projects over the next three years with Britain, France, Italy and Portugal as the priority markets. 'We're in one of the largest revolutions today, possibly an unprecedented revolution with artificial intelligence,' said Hypertec chief executive officer Simon Ahdoot, who announced the expansion on Thursday at the VivaTech trade show in Paris. He added that 'when we see all those challenges brought together into one, we're seeing this unbelievable growth and an opportunity to help transform at the level of infrastructure, not just the IT industry, but all industries.' Mr. Ahdoot said the $5-billion figure represents the cost of building two gigawatts of total capacity, which will be able to support up to 100,000 graphics processing units (GPUs), considered the backbone of AI processing. The money will come from a range of private investors as the projects progress, he added. It's not clear yet how many individual data centres will be built but it could be dozens. Mr. Ahdoot said Bell Canada's data centre in Montreal has capacity for around five megawatts of electric power. 'So for two gigawatts, we're talking about 400 Bell centres,' he said. Hypertec, which is privately held by the Ahdoot family, was established in 1984 primarily as a maker of personal computers. The company evolved over time and expanded into building servers, computing systems, and infrastructure for data centres. It currently has around 700 employees and has built centres in Canada and around the world. The European expansion is the company's largest foray overseas. 'In terms of setting up a presence and developing a data center, this is very new,' he said. Canada takes centre stage as VivaTech trade show opens in Paris Mr. Ahdoot said Hypertec has streamlined its construction and design processes and can build a data centre within six to nine months, less than half the time it normally takes. Evan Solomon, Canada's minister of AI and digital technology, welcomed the company's announcement. 'This is a testament to Canadian innovation,' Mr. Solomon said Thursday at VivaTech. He added that the expansion highlighted 'the international reach of Canadian enterprises and their ability to capitalize transformative investments to power the economy of the future.' Mr. Solomon was asked about the optics of a Canadian company investing so heavily in Europe instead of Canada. The federal government has created a $2-billion fund to encourage AI infrastructure development in Canada. So far only one announcement has been made: a $240-million commitment to Toronto-based Cohere Inc. to help fund its computer processing needs. Cohere will use the money to purchase capacity at a data centre opening later this year in Canada that will be operated by CoreWeave Inc., a U.S. company. By contrast France and other European countries have made a major push into AI infrastructure. During a visit to VivaTech this week, French President Emmanuel Macron said he wanted to 'build a computing power capacity installed in Europe with European solutions.' The French government has also announced €109-billion ($171-billion) worth of investments in AI infrastructure and a €20-billion project involving Canadian-controlled Brookfield Asset Management Ltd. 'Europe's GPU capacity will have tripled between 2024 and 2025 and increased tenfold between 2024 and 2026,' Mr. Macron said Wednesday. Mr. Solomon highlighted Hypertec's Canadian roots and said the company will be investing more in its home country. 'They're investing in Canada and there will be more investment in Canada,' he said. He added that 'Canadian companies that are strong around the world is an example of success. We don't want to inhibit that.' Mr. Ahdoot was more circumspect about opportunities in Canada and he said AI infrastructure has been lagging. 'I think part of the question is, in Canada who do you talk to?,' he said. Decision-making tends to be more centralized than in the United States and other jurisdictions. While there are Canadian projects in the planning stages, Mr. Ahdoot said he expected it will take a couple of years before there will be major announcements. 'Until we have the direction at the government level, it's hard to move forward on strategic projects.' Part of the challenge is sourcing the enormous power required for large data centres. The U.S. has a multitude of utilities that are willing and able to provide the power, but Mr. Ahdoot said Canadian utilities have not been as quick to pivot. However, he said that having a federal cabinet minister dedicated to AI should be helpful in spurring development. 'We're going to talk to Evan, and we're going to let him know. Look, we want to play together. We want to work together,' he said

Globe and Mail
4 hours ago
- Globe and Mail
Barbie maker Mattel partners with OpenAI to launch an AI product
Mattel MAT-Q has teamed up with OpenAI to develop toys and games with artificial intelligence, and expects to launch its first AI-powered product later this year, the Barbie maker said on Thursday. The company, which also makes Hot Wheels and Uno cards, plans to 'bring the magic of AI to age-appropriate play experiences with an emphasis on innovation, privacy, and safety,' it said. The move comes at a time when toy manufacturers are battling muted demand backdrop as consumers rein in spending to brace for the economic fallout of U.S. President Trump's shifting trade policy. Can OpenAI really go the way of Apple and capture lightning in a bottle? Mattel will also incorporate OpenAI's advanced AI tools like ChatGPT Enterprise into its business operations to enhance product innovation, the company said. 'With OpenAI, Mattel has access to an advanced set of AI capabilities alongside new tools to enable productivity, creativity, and company-wide transformation at scale,' said OpenAI operating chief Brad Lightcap. Over the last year, Mattel has relied on producing films, TV shows and mobile games based on its products such as Hot Wheels and Barbie to offset a slowdown in its core toy business. Last month, Mattel withdrew its annual forecast and said it would raise prices on some products sold domestically in a bid to mitigate higher supply chain costs.


Globe and Mail
4 hours ago
- Globe and Mail
How CYBR is Leveraging AI to Cement Its Identity Security Leadership
CyberArk CYBR is rapidly enhancing the capabilities of its identity security platform with AI integration. CyberArk Secure AI Agents Solution and CORA AI are two recent additions to its portfolio. CYBR is also working with Accenture to enhance its identity security platform with Accenture's AI Refinery. The Secure AI Agent solution is designed to protect the AI Agents deployed by CyberArk's enterprise customers from prompt injection, credential leakage, and permission abuse. CORA AI serves as the intelligence engine embedded inside the Secure AI Agent solution. The integration of CORA AI and Secure AI Agents within CyberArk's identity security platform enables it to secure a full spectrum of identities, including human, AI and machine. For humans, the platform secures workforce access, IT systems, developer environments, and both managed and unmanaged endpoints. For AI, the platform secures AI agents and for machines, it protects certificates and workload access. As CyberArk continues to enhance its offerings with upgrades and AI implementation, customers keep on gaining value through improved cybersecurity solutions, safeguarding them from the rapidly evolving cyber threats. CyberArk's subscription ARR grew 65% year over year in the first quarter of 2025 and will continue to grow on the back of robust demand and continued innovations. For 2025, CyberArk expects revenues in the band of $1.313-$1.323 billion. The Zacks Consensus Estimate for the same is pegged at $1.32 billion, indicating year-over-year growth of 31.89%. How Competitors Fare Against CyberArk The broader identity security and access management space consists of several players, including CrowdStrike CRWD and Okta Inc. OKTA, which are also implementing AI in their products. Enterprises can now implement Identity Threat Protection with Okta AI to leverage AI and machine learning techniques for real-time detection of the entire spectrum of Identity attacks. CrowdStrike is another established player in the identity security space, providing unified, real-time protection across cloud, identity and endpoint. CRWD is enhancing its identity security platform with the implementation of AI copilots like Charlotte AI and agentic AI solutions like Charlotte AI Agentic Workflows. The identity security and access management market is expected to witness a CAGR of 8.4% from 2024 to 2029, according to a report by MarketsAndMarkets. All the players, including CrowdStrike, Okta and CyberArk, have ample scope to flourish in this space. CyberArk's Price Performance, Valuation and Estimates Shares of CYBR have gained 19.8% year to date compared with the Zacks Security industry's growth of 20.2%. From a valuation standpoint, CYBR trades at a forward price-to-sales ratio of 13.66X, lower than the industry's average of 14.54X. The Zacks Consensus Estimate for CYBR's fiscal 2025 and 2026 earnings implies year-over-year growth of 25.41% and 25.76%, respectively. The estimates for 2025 and 2026 earnings have been revised upward in the past 30 days. CYBR currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. Today, See These 5 Potential Home Runs >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CyberArk Software Ltd. (CYBR): Free Stock Analysis Report Okta, Inc. (OKTA): Free Stock Analysis Report CrowdStrike (CRWD): Free Stock Analysis Report