Intel Stock Surges Amidst Takeover Rumors and Recovery Signs

A 16% Surge and the Potential for a Turnaround

Intel stock experienced a remarkable 16% surge on Tuesday following a report by The Wall Street Journal suggesting that Broadcom and Taiwan Semiconductor Manufacturing Company (TSMC) are exploring potential bids for the iconic chipmaker. Broadcom is reportedly interested in Intel’s chip design businesses, while TSMC may be eyeing a stake or full ownership of Intel’s manufacturing operations. Although no formal offers have been made yet, the speculation has understandably stirred excitement in the market. However, Intel’s recent progress raises an important question: Is this the right time to sell?

Intel’s business has shown promising signs of recovery, particularly in its manufacturing processes, which are integral to its foundry strategy. The company has hit key milestones in its production processes, and its latest chips have garnered positive reviews. Additionally, U.S. government policies favoring domestic manufacturers like Intel could provide further tailwinds. These factors suggest that Intel may be on the brink of a resurgence, making the timing of a potential sale questionable.

Intel’s Manufacturing Revival: The 18A Process Node

Intel has invested heavily in its U.S.-based foundry business in recent years, despite the unit posting significant losses—nearly $13 billion in 2023 alone. However, the company appears to be nearing a turnaround. The Intel 3 process node has been in mass production for several months, powering Intel’s Xeon 6 data center chips. Meanwhile, the cutting-edge Intel 18A process, the company’s latest innovation, is being sampled by laptop manufacturers.

The 18A process is a game-changer for Intel. It employs gate-all-around transistors, a technology also used by TSMC’s N2 process, but with an added innovation: backside power delivery. This enhancement improves both efficiency and performance, positioning Intel to reclaim “process leadership” after years of trailing behind TSMC and Samsung. Confidence in Intel’s technology is growing, with major tech giants like Microsoft and Amazon contracting Intel to fabricate custom chips, including AI accelerators. This trend could continue, further bolstering Intel’s position in the competitive semiconductor industry.

Trump’s Push for U.S. Manufacturing: A Tailwind for Intel

The U.S. government’s emphasis on strengthening domestic manufacturing, championed by former President Donald Trump, could significantly benefit Intel. The current administration is also prioritizing the domestic production of AI chips to protect American intellectual property. These policies could lead to regulatory support, such as tariffs or incentives, encouraging companies to source their chips from Intel rather than foreign foundries like TSMC.

If Intel were to relinquish control to TSMC, its shareholders might miss out on the potential upside of these favorable U.S. policies. With its extensive domestic fabrication capacity, Intel is well-positioned to capitalize on this shift toward onshore manufacturing. The combination of technological advancements and policy support creates a compelling case for Intel’s future growth.

Positive Reviews for Intel’s Newest Chips

Intel’s latest processors are receiving strong reviews, further fueling optimism about its recovery. Early 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 also boasts a 34% improvement over its predecessor, the i9-14900HX, with a 9% increase in single-thread performance.

These new processors are designed to maximize raw computing power for intensive productivity and creative tasks, distinguishing them from Intel’s AI-focused Lunar Lake chips. The timing of this launch is strategic, as companies have shifted focus to GPUs for AI initiatives in recent years, leading to reduced investments in traditional CPUs. As CPU spending rebounds, Intel may be well-positioned to regain market share and capitalize on this trend.

Intel’s Stock Volatility and the Case for Long-Term Investment

Intel’s stock performance over the past four years has been highly volatile compared to the broader market. While the S&P 500 has provided steady returns, Intel’s stock has swung dramatically—returning 6% in 2021, plummeting 47% in 2022, soaring 95% in 2023, and dropping 60% in 2024. This volatility underscores the risks and uncertainties associated with investing in Intel.

For long-term shareholders who have endured years of underperformance and heavy investments in Intel’s foundry business, selling now might be premature. Transferring manufacturing to TSMC could mean missing out on a potential recovery, particularly as the CPU market shows signs of stabilization. Currently, Intel stock trades at around $27 per share, or just over 22 times 2025 consensus earnings—a valuation that appears reasonable. According to estimates, Intel’s fair value is also around $27 per share, suggesting that the stock is fairly priced at current levels.

Intel’s Market Position and Future Outlook

Intel’s journey over the past few years has been nothing short of tumultuous. From multibillion-dollar losses in its foundry business to the promise of its latest 18A process, the company has navigating [sic] a complex landscape of technological advancements, competitive pressures, and shifting market dynamics. While the takeover rumors involving Broadcom and TSMC have captured headlines, the real story may be Intel’s quiet progress in manufacturing and innovation.

The U.S. government’s push for domestic manufacturing, combined with Intel’s technological strides, could create a perfect storm of growth for the company. For investors, the question remains whether to hold onto Intel stock or explore alternative options, such as rules-based portfolios that offer more stability and superior returns. As the semiconductor industry continues to evolve, one thing is clear: Intel’s future hangs in the balance, and the next few years will be pivotal in determining its trajectory.