Computer board micro chip green by blickpixel via Pixabay
After purchasing a 10% stake in Intel (INTC) last year, the Trump administration announced recently that the company would collaborate with Apple (AAPL) to design and manufacture the latter’s chips.
Curiously, despite President Trump’s assertions, neither company has come out with a formal press release regarding the development. However, that didn’t stop Intel from rallying by 15.83% over the last two trading sessions. Overall, Intel is up 281.95% year-to-date (YTD).
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So, is Apple back in the Intel fold again, or is this time different? And on a broader basis, is this another win for INTC stock?
Apple Rebound For Intel (With A Possible Catch)
Although Trump declared that Intel will be a design partner for Apple, it may not be so. The partnership will perhaps be restricted to Apple, availing Intel’s foundry services through its advanced 18A process of manufacturing chips. Thus, essentially, Apple, whose dependence on TSMC (TSM) for chips is well known, is looking to lessen its dependence on Taiwan.
Nonetheless, it is another win for Intel. Especially, considering it is from Apple.
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It must be remembered that Intel supplied processors for Apple’s Mac computers for nearly 15 years before Apple began transitioning to its internally designed M-series chips in 2020. Apple originally chose Intel back in 2006 because Intel’s x86 architecture offered the best available performance per watt at the time, along with a mature ecosystem that let Mac run Windows through Boot Camp, a major selling point during that era.
The breakup happened for very concrete technical reasons, though. Intel’s process node roadmap stalled badly through the late 2010s, with repeated delays moving past 14 nanometers, while thermal and power efficiency on Intel chips lagged what Apple needed for thin and light notebooks like the MacBook Air. Apple’s own M series silicon, built on ARM architecture and manufactured by TSMC, delivered dramatically better performance per watt, letting Apple ditch fans entirely on the MacBook Air while still beating Intel chips on benchmarks.
Coming to the latest deal, this is a credibility-defining foundry win for Intel. Analyst Ming-Chi Kuo and GF Securities outlined the likely scope as Apple’s M7 SoC built on Intel’s 18A-P process, powering the MacBook Air and entry-level iPad Pro, with mass production targeted for late 2027. However, Intel will not be making chips for the iPhone 18 Pro Max or the newest M-series Mac chips, with TSMC retaining more than 90% of Apple’s overall supply, and Intel’s role limited to lower-end chips rather than flagship silicon.
Financials Reflecting The Wider Optimism
Intel delivered a strong start to 2026, securing a solid double beat on both revenue and earnings during the first quarter.
Total revenue rose 7% year-over-year (YOY) to $13.6 billion in the first quarter. The main contributors were the Data Center and Artificial Intelligence segment, which grew 22% to $5.1 billion, together with the Foundry business advancing a healthy 16% to $5.4 billion. By comparison, the Client Computing Group, Intel’s largest revenue segment, recorded more limited growth of just 1% to $7.7 billion, held back by supply constraints and a saturated personal computer market.
On the earnings side, earnings per share more than doubled to $0.29, comfortably exceeding consensus estimates by a wide margin. This result extended Intel’s streak of consecutive earnings beats to three quarters.
For the second quarter of 2026, management guided for revenue in the range of $13.8 billion to $14.8 billion, along with non-GAAP earnings per share of $0.20. Wall Street currently expects $14.4 billion in revenue and $0.21 per share.
Cash generation also improved in the quarter, with net cash from operating activities increasing to $1.1 billion from $813 million in the year ago period. Intel closed the quarter with a robust cash balance of $17.7 billion, well above its short term debt levels of approximately $2 billion.
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Valuation remains a notable challenge for the INTC investment case, however. The shares continue to trade at a premium relative to both sector peers and the company’s own historical averages. The forward price-to-earnings multiple of 122.66 times, forward price-to-sales multiple of 11.47 times, and price-to-cash flow multiple of 47.86 times all stand significantly above relevant sector medians. This leaves the stock heavily dependent on continued strong execution to justify the higher valuation assigned by the market.
What Do Analysts Think of Intel Stock?
Overall, analysts have a rating of “Hold” for INTC stock, with the mean target price of $93.92 already surpassed. The Street-high target price of $150 denotes a potential upside of 6.43% from current levels. Out of 45 analysts covering INTC stock, 10 have a “Strong Buy” rating, one has a “Moderate Buy” rating, 32 have a “Hold” rating, and two have a “Strong Sell” rating.
On the date of publication, Pathikrit Bose did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
