Is Intel Stock a Buy After Its AI-Driven Turnaround and Strategic Reset?

Intel's stock has surged nearly 90% year-to-date in 2025, outperforming even industry giants like Nvidia according to reports. This rally has been fueled by a combination of strategic investments in artificial intelligence (AI), a rumored partnership with Apple, and a broader reset of the company's manufacturing ambitions. Yet, beneath the surface, the stock remains a high-risk proposition. To assess whether Intel is undervalued or overhyped, we must dissect its AI-driven turnaround, the feasibility of its 18A process, and its competitive positioning against TSMC and other peers.

The AI-Driven Turnaround: Progress or Hype?

Intel's recent performance has been bolstered by its push into AI. The company introduced the Core Ultra processors (Panther Lake on 18A) for AI-focused PCs, slated for late 2025. These chips aim to capture a segment of the market where AI capabilities are becoming a key differentiator. Additionally, Intel's Q3 2025 earnings beat revenue forecasts-delivering an adjusted profit of $0.23 per share and surpassing revenue forecasts.

However, the broader financial picture remains mixed. Over the past three years, Intel's revenue has contracted by an average of -7.6% annually, and its operating margin for the last 12 months stands at a concerning -0.2% according to data. While the company has secured significant funding-$5 billion from Nvidia, $2 billion from SoftBank, and $8.9 billion under the U.S. CHIPS Act according to reports-these inflows must translate into sustainable growth. Analysts remain cautious, with a $25 price target for INTC stock reflecting skepticism about its ability to stabilize its core PC business or gain traction in the foundry market.

The Apple Partnership: A Strategic Win or a Long-Term Gamble?

Recent rumors suggest Apple is set to partner with Intel to manufacture its lowest-end M-series chips using the 18A-P process by mid-2027 according to analyst reports. This collaboration, if confirmed, would mark a significant shift for Intel. Apple's decision to sign a non-disclosure agreement and receive an early version of Intel's process design kit indicates progress, but the partnership is far from a guaranteed success.

The stakes are high. Intel's 18A-P process, currently the earliest sub-2nm node in North America, could meet Apple's performance and efficiency requirements for devices like the MacBook Air and iPad Pro. However, TSMC will continue to supply the majority of Apple's chips, and Intel's foundry business still lags in scale and yield. Analyst Ming-Chi Kuo notes that Intel's 18A yields are estimated at 20–30% according to industry analysis, far below TSMC's 60% for its 2nm process according to data. This gap underscores the long-term nature of the partnership: it is a strategic diversification for Apple and a potential endorsement for Intel, but not an immediate turnaround.

Technical Feasibility: Can 18A Compete with TSMC's 2nm?

While Intel claims its 18A outperforms TSMC's N2 in third-party evaluations according to performance data, the company's yield challenges and manufacturing maturity remain hurdles. TSMC's leadership in backside power delivery for its A16 node further cements its advantage. For Intel to close the gap, it must not only scale 18A yields but also secure early foundry customers-a task complicated by its historical struggles in this arena according to analysts.

Valuation and Peer Comparisons: A Mixed Picture

Intel's valuation metrics are less transparent than those of its peers, but industry context provides insight. TSMC trades at a forward P/E of 25 and an EV/EBITDA under 14 according to financial analysis, reflecting its dominance in AI chip manufacturing. NVIDIA, with a trailing P/E of 45.15 and forward P/E of 26.26 according to stock data, commands a premium due to its AI and data center growth. AMD, meanwhile, has forecast $4 billion in AI chip sales for 2024 according to market reports, signaling its rising relevance.

Intel's lack of explicit 2025 valuation data makes direct comparisons difficult. However, its recent stock surge-driven by speculative bets on AI and Apple-suggests the market is pricing in aggressive growth. Given its weak revenue trajectory and negative operating margin according to financial analysis, this optimism may be overhyped. Analysts project a cautious $25 target price according to market consensus, implying limited upside relative to current levels.

Conclusion: A High-Risk, High-Reward Proposition

Intel's AI-driven turnaround and Apple partnership rumors have injected momentum into its stock, but the company's fundamentals remain fragile. The 18A process is technically competitive, yet TSMC's 2nm holds a clear edge in yield, density, and ecosystem strength. The Apple deal, while strategically significant, is a long-term play that won't resolve Intel's immediate challenges.

For investors, the key question is whether the current valuation reflects realistic expectations or speculative overreach. While Intel's recent funding and product roadmap are promising, its history of underperformance and operational struggles warrant caution. The stock may appeal to those willing to bet on a renaissance, but it is far from a clear buy. As the AI and semiconductor landscapes evolve, Intel's ability to execute on its 18A roadmap and secure meaningful foundry contracts will determine its long-term prospects.