In recent weeks, Intel has outlined an ambitious AI- and foundry-focused reset under new CEO Lip-Bu Tan, while also securing a multibillion‑dollar equity investment from Nvidia tied to custom AI chip collaborations. At the same time, analysts and investors are weighing weak near‑term guidance, persistent foundry losses, and intensifying data center competition against this transformation agenda.
A particularly important development is Nvidia’s US$5.00 billion stake in Intel, which aligns both companies around co‑developing AI products and could reshape Intel’s role as a third‑party manufacturing partner in high‑performance computing.
We’ll now examine how Nvidia’s US$5.00 billion investment and deepening AI collaboration could reshape Intel’s investment narrative and risk profile.
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To own Intel today, you have to believe its AI reset and foundry pivot can eventually turn persistent losses into a sustainable, higher margin business, despite weak near term guidance and execution risk. Nvidia’s US$5.00 billion stake raises the stakes on Intel’s foundry roadmap and AI product delivery, but it does not remove the immediate pressure from foundry losses and tougher data center CPU competition, which remain the key short term risk.
Against that backdrop, Nvidia’s decision to invest US$5.00 billion and co develop AI products with Intel looks most relevant, because it directly touches the core catalyst of restoring manufacturing credibility and winning meaningful third party foundry volume. This partnership sits alongside Intel’s AI PC and data center GPU plans, potentially reinforcing the idea that its 18A process and packaging capabilities can attract blue chip customers even while the P&L is still under strain.
Yet, despite this optimism, investors should be aware that Intel’s ongoing foundry losses and below par yields could still…
Read the full narrative on Intel (it’s free!)
Intel’s narrative projects $58.1 billion revenue and $5.2 billion earnings by 2028. This requires 3.1% yearly revenue growth and a $25.7 billion earnings increase from $-20.5 billion today.
Uncover how Intel’s forecasts yield a $47.12 fair value, a 4% upside to its current price.
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Some of the lowest ranked analysts were expecting Intel’s revenue to slip about 0.5 percent a year and earnings to reach only about US$2.2 billion by 2028, which is far more pessimistic than the consensus story you just read. When you add in concerns about organizational complexity from that alternate view, it shows how widely opinions can differ and why this Nvidia collaboration could meaningfully shift expectations in either direction.
Explore 27 other fair value estimates on Intel – why the stock might be worth as much as 29% more than the current price!
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include INTC.
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