Intel (NASDAQ:INTC) is making headlines as Nvidia (NASDAQ:NVDA) and Broadcom (NASDAQ:AVGO) reportedly test its most advanced manufacturing process, 18A. According to a Reuters report citing anonymous sources, the AI leaders are assessing whether Intel’s 18A technology could meet their future chip production needs.

While none of the companies involved have publicly commented, INTC surged over 3% following the news. This development fuels speculation that the company could secure major foundry contracts, potentially reshaping its financial outlook.

Why This INTC News Is Significant

Winning Nvidia or Broadcom as customers would be a game-changer for Intel’s struggling chip manufacturing business. The company has been working to establish itself as a leading foundry, but years of losses and technical setbacks have made progress difficult.

If Intel’s 18A process proves successful, it could unlock lucrative contracts worth hundreds of millions—or even billions—of dollars. However, regulatory hurdles surrounding intellectual property could delay widespread adoption of 18A until at least late 2026.

Still, markets often price in future potential, meaning an announcement that Intel has secured Nvidia or Broadcom as customers could provide a significant boost to its stock price.

Can Intel Compete With Taiwan Semiconductor?

Intel has long claimed that its 18A process could challenge the dominance of Taiwan Semiconductor Manufacturing Company (NYSE:TSM), the world’s largest contract chipmaker. A vote of confidence from Nvidia and Broadcom would help validate this claim, signaling that Intel is becoming a serious competitor in the foundry business.

If Intel successfully lands these tech giants as clients, it could encourage other companies to follow suit. This domino effect could significantly expand the company’s foundry business, strengthening its long-term revenue prospects.

According to Jordan Klein, an analyst at Mizuho, fixing the 18A issues would allow INTC to “start to win external foundry business [and] have success yielding advanced node product designs in server and data center products.”

Wall Street’s Take on INTC

Despite the optimism surrounding this INTC news, analysts remain cautious. Running tests does not guarantee that Nvidia or Broadcom will commit to large-scale manufacturing contracts. As a result, Wall Street analysts continue to rate INTC as a “Hold.”

The current consensus price target for INTC sits at $24.24, which aligns closely with its trading price at the time of writing. While the potential is there, investors may need to see concrete agreements before sentiment shifts more decisively.

The Bottom Line

Intel stock is seeing renewed attention as Nvidia and Broadcom test its 18A process. While this could lead to major foundry contracts, challenges remain, particularly with intellectual property concerns and competition from Taiwan Semiconductor. Investors should watch for further developments, as confirmation of a deal could significantly impact INTC’s market position and stock price.

What’s Next for INTC Stock?

For Intel to truly capitalize on this opportunity, it must address both technical and business challenges. The company has struggled with delays and execution issues in recent years, and investors remain skeptical about its ability to compete with Taiwan Semiconductor (NYSE:TSM) on a global scale.

Another key factor to watch is the broader semiconductor industry. Demand for AI chips is surging, and companies like Nvidia are constantly seeking cutting-edge manufacturing processes to maintain their competitive edge. If Intel can prove that its 18A process delivers superior performance and efficiency, it could open the door to long-term partnerships with leading chip designers.

Ultimately, while this news is encouraging, investors should remain patient. Until there is a formal agreement with Nvidia, Broadcom, or other major clients, Intel’s foundry ambitions remain a work in progress. A confirmed deal, however, could send INTC shares soaring.

Featured Image: Pexels @ Pok Rie

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