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$Intel(INTC)$

If you're an Intel shareholder, 2025 is off to a strong start—especially when you consider the stock's performance over the past couple of years. However, from a business standpoint, there's still a long road ahead.

It's great to see Intel's stock up 23.5% year-to-date, with an additional 5.2% gain pre-market following some positive news about Intel Foundry. In this video, we'll dive into that update, discuss the delays with the Ohio factory, and explore the potential impact on Intel’s 18A process.

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Intel's $28 Billion Ohio Chip Factory Delayed Again

Intel has once again postponed its $28 billion semiconductor project in New Albany, Ohio, pushing completion to 2030 or 2031. The company originally planned to begin operations in 2025, meaning this project is now facing at least a five- to six-year delay. Additionally, Intel’s second Ohio factory won’t be operational until at least 2032.

Not exactly great news, but Intel Foundry's Executive Vice President of Global Operations explained that the delay is aimed at aligning factory operations with market demand while ensuring financial responsibility. Intel remains committed to Ohio 1, with plans to scale hiring as operations approach.

What's Really Behind the Delay?

It’s hard to believe it takes six years to build a factory in the U.S., especially when you compare it to projects like Tesla’s Giga Austin, Giga Berlin, or Shanghai’s Megapack factory—which were completed much faster. This delay might be more about Intel waiting to see if the next U.S. administration provides additional funding.

Intel initially committed $100 billion in U.S. investments, yet received only $8 billion from the CHIPS Act, which is a fraction of what they might have hoped for. Some are concerned about how this impacts Intel’s 18A process, but as long as the Arizona fab remains on track, 18A should be fine.

Positive News for Intel Foundry

Despite the Ohio delays, Intel Foundry received a major boost: Nvidia and Broadcom are now testing Intel’s chip manufacturing process, which helped drive the stock higher in pre-market trading. We'll break down what this means for Intel in the rest of the articles.

Intel Shares Surge Over 6% Premarket Amid Foundry Optimism

Intel shares are up more than 6% premarket following reports that Nvidia and Broadcom are testing its 18A manufacturing process. According to Reuters, sources familiar with the matter suggest this could indicate early confidence in Intel’s advanced production technology.

While testing is still ongoing, the report notes that there’s no guarantee Intel will secure long-term deals with either company. However, if Nvidia and Broadcom commit to significant manufacturing contracts, it could provide a much-needed revenue boost to Intel’s struggling Foundry business.

Intel declined to comment on specific customers but reaffirmed that interest in its 18A process remains strong across the ecosystem. Additionally, the report mentions that AMD is also evaluating 18A, though it's unclear whether test chips have been sent to Intel’s factories.

Where There’s Smoke, There’s Fire?

Looking back, similar reports surfaced in previous years. On May 30, 2023, Nvidia’s CEO stated that Intel’s test chip results for its next-gen process were “good,” hinting that Intel-built Nvidia GPUs could be on the horizon. Later, in August 2024, reports suggested Intel might soon land Nvidia as a Foundry customer, with speculation that it could produce 5,000 H100 wafers per month. Now, nearly six to seven months later, Reuters is reporting on Intel’s ongoing collaboration with Nvidia and Broadcom—suggesting momentum may be building.

Of course, Intel doesn’t expect its Foundry business to break even until 2027, but continued commitments could change investor sentiment. This is why I’ve always believed Intel Foundry shouldn’t be sold, despite past speculation that companies like Broadcom or TSMC might take a stake in it. While an investment could make sense, a full buyout would be a bearish move for long-term investors.

Intel’s Valuation & Recent Performance

Intel’s long-term turnaround is still unfolding, and as Jim Keller once said, a highly efficient Intel could be worth $1 trillion. While that’s a lofty goal, Intel at its current $100 billion valuation still appears undervalued, in my view.

That said, Q1 was a weak quarter—which is typical seasonally, but Intel missed across the board:

• Revenue fell short by 5%

• Gross margins missed by 330 basis points

• EPS took a significant hit

Despite this, sentiment around the stock has improved, with Intel up over 20% year-to-date, partially fueled by acquisition rumors and growing confidence in its Foundry business.

I’ve always maintained the same stance—the business itself needs to prove that it's truly turning around. A key part of my thesis, especially for Intel Foundry, revolves around 18A, and I believe 2025 will provide more answers than questions.

On the client side, things are improving, but I don’t want to base my confidence on just one or two good quarters. I need to see consistent progress every quarter, and hopefully, that’s what we’ll get in 2025.

While it’s encouraging to see the stock outperform year-to-date, the business itself still needs to deliver solid results. The positive comments about Intel Foundry and 18A are great to hear, even if the Ohio factory delays aren’t ideal. That said, from a financial standpoint, it makes sense for Intel to delay massive investments into projects that won’t generate revenue or profits for years. Instead, maximizing the capacity of their existing facilities is a much more disciplined approach.

Intel’s Outlook for 2025: A Make-or-Break Year?

Overall, this is good news for Intel and even better news for Intel Foundry—if the reports are accurate. Given that these discussions have been circulating since 2023, and now into 2024 and 2025, there’s likely some truth to them—especially considering recent management comments from earnings calls.

As an Intel shareholder, 2025 is shaping up to be a pivotal year. Personally, I’m currently up around 10% on my position—not bad. A week ago, when the stock was trading above $27.

Looking ahead, we’re starting the week with another attempt to break past that level. If we look at July 2024, Intel made a similar attempt that didn’t hold, and that large gap on the chart—starting around $28-$29—is something to keep an eye on.

At the end of the day, 2025 is a make-or-break year for Intel. Either they demonstrate real progress and momentum across the business, or I’ll jump ship—just like their CEO... well, their soon-to-be former CEO, since there’s still no announcement on a successor, which is quite surprising.

Disclaimer: I want to make it clear that I am not a financial advisor, and nothing I say is intended to be a recommendation to buy or sell any financial instrument. Additionally, it's important to remember that there are no guarantees or certainties in trading or investing, and you should never invest money that you can't afford to lose.

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