Is Intel Stock the winner of hidden AI?
Once a Titan in the semiconductor industry, Intel (INTC) has struggled in recent years to keep up with the rapidly evolving competition, particularly in the fast-growing field of artificial intelligence (AI). Losing leadership in Taiwan Semiconductors (TSM) manufacturing, it has lagged behind the AI revolution led by NVIDIA (NVDA) and Advanced Microdevices (AMD).
However, recent developments mean that the company may be quietly preparing for a considerable turnaround. The second quarter results show a new focus on business and AI, undergoing major transformation under a disciplined new leadership team. Intel’s stock has grown by just 1.94% through the year, but analysts are hoping to rise 200% from current levels.
Find out if Intel could be a hidden AI winner and if it’s worth buying now.
The high-tech giant is attempting to transform the high-stakes, relying on upcoming products such as the cutting-edge 18A process nodes, Lake Panther and Lake Nova, as well as complete repairs to its internal culture and customer relationships. Intel reported a second quarter that exceeded expectations, revenues of $12.9 billion and consensus estimates exceeding $977.2 million, down from the previous year. This performance was supported by strong demand in Intel’s Client Computing Group (CCG) and in the data center and AI (DCAI) sector. This is the two biggest revenue drivers.
Intel Foundry’s second quarter revenue of $4.4 billion has gained traction as it drops 5% to increase its next-generation process node, Intel 18a. According to Reuters Earlier this month, Intel CEO Lip-Bu Tan plans to move from the 18A manufacturing process to the 14A process. During the second quarter revenue call, Tan said the 18A node is expected to support the next three generations of Intel clients and server CPUs. The company plans to release its first major 18A-based CPU, Panther Lake, by the end of the year. Once the internal volume shows strong yield consistency, Intel wants to convert them into the external casting business.
Tan admitted the previous errors at 18A and stated that these lessons already apply to 14A. He said external customers are currently involved in the early stages of 14A development. Tan also revealed that Intel is not in a hurry to develop or deploy the next Node 14A until there is a clear signal of yield maturity, customer demand and economic viability. Intel has been cautious about capital expenditures, with its 2025 net CAPEX forecast of between $8 billion and $11 billion, a significant drop from the past. The goal is to achieve long-term sustainable profitability through improved scale, efficiency and product design. The company reported an adjusted loss of $0.10 per share in the second quarter, compared to earnings of $0.02 for the previous year’s quarter. Analysts expect 2025 to earn $0.13 per share, up 445% in 2026 to $0.49.