Intel Stock Price Forecast - INTC Shares Holds Steady Near $40 as Apple 18AP Deal and AI Boom Fuel Long-Term Optimism

Intel (NASDAQ:INTC) Enters a New Phase as Apple Partnership and AI Demand Ignite Turnaround Momentum

Revenue Stabilization and Margin Recovery Signal a Structural Shift

Intel Corporation (NASDAQ:INTC) is staging one of the most dramatic rebounds in the semiconductor sector. After years of margin compression and supply setbacks, Q3 2025 results confirmed a turnaround: revenue climbed to $13.65 billion, up 2.78% YoY, marking the first sustained top-line growth since 2021. Net income soared 124.4% YoY to $4.06 billion, while EPS jumped 150% to $0.23, underscoring a sharp operational recovery. Gross margin rebounded to 33.9%, reversing last year’s deep contraction, and operating margin turned positive at 11.2%, signaling the return of profitability across core business lines.

Consumer and Data Center Segments Drive Intel’s Recovery

Consumer chip sales surged to $8.5 billion, driven by strong PC refresh cycles, Windows 11 upgrades, and a growing wave of AI-enabled personal computers. However, to maintain competitiveness against AMD and Qualcomm, Intel is sacrificing near-term margin expansion for market share. Meanwhile, the data center segment remains Intel’s biggest strategic lever. Despite flat YoY revenue, operating margin expanded over 1,400 basis points, driven by efficiency gains and higher Xeon chip adoption. The newly announced NVIDIA partnership to co-develop custom PC and data-center products suggests Intel is not retreating — it’s repositioning itself for AI-centric infrastructure demand.

Intel Foundry: From Drag to Catalyst

Intel’s foundry division — once a drag on financials — is now central to its comeback narrative. Operating losses narrowed sharply in Q3, supported by above-expectation wafer output and the activation of Fab 52 in Arizona’s Ocotillo campus, which now operates at full scale. This aligns with the U.S. government’s 9.9% non-voting equity stake in Intel and Washington’s CHIPS Act mission to onshore semiconductor production. The foundry business, if the rumored Apple 18AP partnership materializes, could deliver Intel its first major third-party manufacturing win in decades, reversing years of lost ground to TSMC.

Apple Partnership Could Redefine Intel’s Future

On November 28, 2025, Intel stock jumped 10.2%, trading around $40.03, after supply-chain reports indicated progress in securing Apple’s foundry contract. Under the rumored deal, Intel would manufacture Apple’s next-generation M-series chips on its 18AP node — a major win that could anchor Intel’s $200 billion foundry expansion. Apple reportedly awaits updated Process Design Kits (PDKs) from Intel by early 2026 to validate chip design performance and energy efficiency. Success here could lead to mass production by Q2–Q3 2027, with Apple integrating Intel-manufactured chips in MacBook Airs, iPads, and Mac Minis.

Intel’s RibbonFET and PowerVia technologies, designed for improved transistor efficiency and power delivery, are at the core of this pitch. These innovations could allow Intel to meet Apple’s strict performance-per-watt requirements — a key differentiator against TSMC’s 3nm process. A verified 18AP process would not only make Intel a credible foundry player again but could open contracts from other Tier-1 U.S. tech firms seeking domestic supply chains.

Financial Resilience Strengthens Confidence

Liquidity is improving fast. Intel ended Q3 with $30.94 billion in cash and short-term investments, up 28.4% YoY, while total liabilities fell 1.01% to $87.78 billion. The current ratio improved to 1.60, and free cash flow exploded 2,200% YoY to $4.08 billion, marking Intel’s strongest cash generation since 2020. With total assets at $204.5 billion and equity at $116.7 billion, balance sheet stability provides a strong foundation for multi-year capital investments.

Valuation Reflects Hope, Not Yet Certainty

At a market capitalization of $191.16 billion and a P/E ratio of 108x forward earnings, NASDAQ:INTC trades at a premium to its historical average but below its 2021 peak. The price-to-book ratio of 1.82x suggests fair valuation given the current asset base. If Intel secures Apple’s business, potential annual revenue could exceed $1.4 billion, adding roughly $425 million in earnings based on current margins. Such incremental profitability could compress Intel’s forward P/E toward 20x by 2028, aligning it with semiconductor peers like Texas Instruments (NASDAQ:TXN) and Micron (NASDAQ:MU).

Short-Term Risks and Q4 Outlook

Intel’s Q4 2025 guidance calls for a 7% YoY revenue decline and a 5.6-point contraction in gross margin, suggesting a non-linear recovery. EPS is projected to drop $0.05 sequentially, underscoring ongoing volatility in data center demand and foundry ramp-up costs. However, these fluctuations are expected in early-stage turnarounds, especially as Intel invests billions into high-volume U.S. fabs.

Final Outlook: A Hold with Bullish Bias

Intel (NASDAQ:INTC) is trading near $40.03, showing a powerful rebound from its 52-week low of $17.67, driven by optimism around AI-powered PC demand and the rumored Apple 18AP node deal. The company’s Q3 2025 net income surged 124% YoY to $4.06 billion, with EPS rising 150% to $0.23, confirming its turnaround momentum. Free cash flow soared 2,200% to $4.08 billion, reinforcing liquidity strength as Intel builds new U.S. fabs under the CHIPS Act. If Apple confirms a foundry partnership in 2026, revenue could climb by $1.4 billion annually, significantly boosting earnings and potentially compressing forward P/E ratios toward 20x by 2028. However, Q4 guidance signals a 7% YoY revenue dip and margin pressure, keeping volatility in focus. Despite short-term weakness, the strategic alignment with U.S. manufacturing and AI infrastructure demand provides a long-term growth anchor. The 18AP process remains the make-or-break milestone—commercial validation could redefine Intel’s valuation curve. For now, Intel stands as a Hold with a bullish bias, supported by a resilient balance sheet, strong institutional backing, and rising investor confidence that this rebound is more than temporary.

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