Intel’s revenue has fallen by approximately 33% since 2021, a trend driven in large part by Apple’s strategic shift away from Intel processors. This pullback from a marquee customer has left Intel grappling with excess capacity and weaker pricing power. The company’s operating margins turned negative in the most recent quarter, marking the first time in over a decade that Intel reported an operating loss, as manufacturing underutilization and aggressive discounting weighed on profitability.

To bolster its manufacturing footprint, Intel secured an $8.9 billion incentive package from U.S. federal and state authorities. These funds are earmarked for two new advanced semiconductor fabrication plants in Arizona, with initial production now expected in mid-2027—roughly six months later than originally projected. Intel has also committed to early adoption of ASML’s next-generation high-NA lithography systems, a move designed to accelerate its process-node roadmap and narrow the gap with industry leader TSMC.

In its most recent quarter, Intel outperformed conservative guidance by reporting adjusted earnings per share above internal projections, even as revenue declined by 4.1% year-over-year due to ongoing supply constraints. Following the results, several research firms upgraded their ratings on Intel stock, citing improving cost structure and a clearer path to margin recovery. One major equity strategist raised its recommendation to a positive stance, emphasizing that the worst cash burn phase appears to be behind the company.

Intel is positioning itself to capture a share of the booming artificial intelligence market by pursuing potential foundry partnerships with leading cloud providers, including Nvidia and Microsoft. These collaborations could generate tens of millions of dollars in new wafer sales annually once yields on Intel’s 18A process improve. However, production delays on this bleeding-edge node have constrained supply, delaying anticipated revenue from AI accelerators until late 2026.