Can Intel Rise Again? Apple Talks Spark Hope for $40 Target

$Intel(INTC)$

Intel was once the undisputed king of semiconductors. For decades, the company defined computing performance, rode the PC boom, and held dominant market share across data centers and consumer devices. But in recent years, Intel has been relegated to the sidelines as rivals like AMD, Nvidia, and Taiwan Semiconductor Manufacturing Co. (TSMC) surged ahead.

Now, the narrative may be shifting. Intel has reportedly approached Apple for a potential investment and collaboration, a surprising development that, while still in early discussions, has already sparked renewed investor enthusiasm. Shares jumped 6% higher on Wednesday, signaling the market is once again willing to entertain the idea of an Intel comeback.

At around $30 per share, with a market capitalization of $116.2 billion, Intel trades at levels that reflect widespread skepticism. But could this be the moment where the underdog finally claws its way back into contention? Is there enough upside left for Intel to regain lost ground — or is this just another false dawn in a long series of missed opportunities?

Let’s break down the situation in detail.

Intel and Apple: Why This Headline Matters

Intel and Apple have had a complicated history. Apple once relied on Intel chips for its Mac line but moved away in favor of its own silicon, produced by TSMC. That shift was widely seen as a blow to Intel’s prestige — a sign that it was no longer the first choice for cutting-edge customers.

So why would Apple now even consider an investment or partnership? Several reasons stand out:

1. Geopolitical Risk Diversification – Apple is deeply dependent on TSMC, which produces the vast majority of its advanced chips in Taiwan. With rising geopolitical tensions in the Taiwan Strait, Apple may want a U.S.-based alternative.

2. Intel’s Foundry Ambitions – Intel has been repositioning itself as not just a chip designer, but a foundry player, competing with TSMC and Samsung to manufacture chips for third parties. Apple’s support would lend enormous credibility.

3. Strategic Hedge – Even a minority investment from Apple could serve as a hedge against supply disruptions or pricing power from TSMC.

While the talks are early and may not produce an immediate deal, the symbolism is powerful: Intel is back in conversations with the world’s most valuable company.

Intel’s Fall from Grace

To understand why this matters so much, we need to revisit how Intel got here.

• 2000s: Peak Dominance – Intel controlled more than 80% of the global CPU market, setting the pace for Moore’s Law.

• 2010s: Stumbles Begin – Manufacturing delays plagued Intel’s 10nm process, while TSMC surged ahead in executing advanced nodes.

• Competition Heats Up – AMD, once on the brink of collapse, re-emerged with its Ryzen processors and EPYC data center chips. Nvidia, meanwhile, capitalized on GPUs, carving out dominance in AI and high-performance computing.

• Apple Walks Away – Apple’s move to in-house M-series chips symbolized a loss of confidence in Intel’s ability to deliver cutting-edge performance and efficiency.

By the early 2020s, Intel was widely viewed as a legacy player, weighed down by bureaucracy, technical execution problems, and eroding market share.

Pat Gelsinger’s Turnaround Plan

When Pat Gelsinger returned as CEO in 2021, Intel embarked on an ambitious turnaround strategy known as “IDM 2.0” (Integrated Device Manufacturing). The plan rests on three pillars:

1. Foundry Services – Building Intel Foundry Services (IFS) to compete with TSMC and Samsung.

2. Manufacturing Roadmap – Achieving “five nodes in four years,” regaining process leadership by 2025.

3. Strategic Partnerships – Collaborating with governments (CHIPS Act subsidies) and customers to restore confidence.

Execution has been mixed so far. Progress has been made, but skepticism remains high given Intel’s track record of delays. That’s why even preliminary Apple interest is so significant — it suggests external validation of Gelsinger’s vision.

Is Intel Still a Buy at $30?

Intel’s valuation reflects its underdog status. At ~$30 per share, it looks cheap compared to peers:

• Forward P/E: ~13x (versus AMD ~28x, Nvidia ~40x+).

• Price-to-Sales: ~2x (versus Nvidia ~20x, AMD ~9x).

• Dividend Yield: Intel offers modest income (after a dividend cut), while rivals don’t pay dividends.

However, cheap valuations don’t always mean good value. Intel faces:

• Declining Revenue – Still struggling to regain growth.

• High CapEx – Billions being spent on foundries may weigh on margins for years.

• Competitive Pressure – AMD dominates CPUs, Nvidia rules GPUs, and TSMC owns the foundry crown.

The bull case: Intel is priced for failure, leaving room for significant upside if execution improves. The bear case: it’s a value trap, destined for slow decline.

Can Intel Hit $40?

A move to $40 per share would imply roughly 33% upside from current levels. For this to happen, several catalysts are necessary:

1. Apple Partnership Confirmation – Even a limited deal could re-rate the stock upward.

2. Foundry Wins – Securing large contracts from big tech clients would validate IFS.

3. AI Exposure – Intel must carve out relevance in AI chips, either through its Gaudi accelerators or partnerships.

4. Macro Tailwinds – U.S. government support (CHIPS Act subsidies) and geopolitical diversification could help.

Without at least one major catalyst, $40 may be difficult to justify. But with momentum building, it’s within reach if Intel can deliver.

Market Cap Perspective: How Much Upside Is Left?

At $116.2 billion, Intel looks small compared to its peers:

• Nvidia: ~$2 trillion

• TSMC: ~$500 billion

• AMD: ~$250 billion

If Intel simply regained parity with AMD, it would imply doubling in market cap. To challenge TSMC or Nvidia again would require flawless execution over a decade.

That said, investors don’t need Intel to win the entire race. Even a partial recovery could drive significant shareholder returns from these depressed levels.

Could Other Giants Join Intel?

The Apple rumor opens the door to broader speculation: could other tech giants align with Intel?

• Microsoft: Needs secure chip supply for its AI servers.

• Amazon (AWS): Already designs its own Graviton chips but may diversify manufacturing.

• Google: Heavily reliant on TSMC for TPU production, may want redundancy.

• Automakers: Intel’s Mobileye subsidiary is a leader in autonomous driving chips, creating natural synergies.

The geopolitical backdrop strengthens Intel’s case. With U.S. policymakers keen to reduce reliance on Taiwan, Intel is positioned as the domestic champion. Big Tech may want to back that effort.

The Risk Factors

Investors should also weigh the risks:

1. Execution Risk – Intel has a track record of overpromising and underdelivering on process nodes.

2. Capital Intensity – Foundry expansion requires massive investment with uncertain payoff.

3. Competitive Pressure – AMD, Nvidia, and TSMC continue to innovate aggressively.

4. Margin Compression – Even if Intel grows, profitability may lag for years.

5. Investor Fatigue – After years of disappointment, Intel’s credibility is fragile.

Investor Takeaways

• Intel at $30 is a contrarian bet – Valuations are cheap, but risks remain high.

• Apple talks revive credibility – Even rumors of partnership show Intel is back in big conversations.

• Upside potential exists – $40 is possible if catalysts align, though not guaranteed.

• Market cap leaves room – Intel doesn’t need to beat Nvidia; partial recovery could double its size.

• Strategic partnerships are key – More tech giants signing on would validate the turnaround.

Final Thoughts: Intel’s Revenge Play

Intel’s “revenge comeback” narrative is far from certain, but it is gaining traction. The company is fighting to reinvent itself as both a chip designer and a foundry powerhouse. Preliminary talks with Apple have injected excitement into the story, and the low valuation offers contrarian investors a tempting entry point.

This week, and in the months ahead, the question is whether Intel can convert speculation into reality. If partnerships materialize and execution improves, Intel could be on its way back toward relevance — and perhaps toward that $40 target. If not, the stock risks remaining a perennial underperformer.

The revenge comeback is underway. But the ending remains unwritten — and investors must decide whether they believe Intel can finally surprise the market again.