After years of playing defense, Intel surprised investors in 2025 by showing genuine momentum. Shares climbed roughly 80% over the year, a sharp reversal from the stagnation that defined much of the past decade.
Massive U.S. government support tied to domestic chip manufacturing, key backing from SoftBank, and a high-profile partnership with Nvidia have materially strengthened Intel’s balance sheet. And 2026 may well be the year that effort starts to pay off.
Key Points
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The 18A node is ramping in Arizona and could be competitive with TSMC, with capacity expansion in 2026 turning supply constraints into growth.
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Backing from the U.S. government, SoftBank, and Nvidia has strengthened Intel’s balance sheet and credibility.
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Intel has swung from losses to profits, and accelerating earnings could drive upside beyond current targets.
A realistic shot at catching TSMC
Intel’s struggles over the past several years are well known. Delays at advanced manufacturing nodes allowed Taiwan Semiconductor Manufacturing to pull far ahead.
TSMC’s 3-nanometer process has been a commercial success, delivering meaningful performance-per-watt gains that customers eagerly adopted.
Unlike prior node transitions that slipped repeatedly, Intel’s 18A technology is already moving through early production in Arizona. Intel’s Fab 52 facility is not only larger than TSMC’s Arizona operation, but also more heavily equipped for advanced manufacturing. The fab is built around the latest extreme ultraviolet lithography tools from ASML, the same machines that underpin cutting-edge chips across the industry.
What most investors don’t appreciate is how much capacity flexibility Intel has baked into this site. Initial output is estimated around 10,000 wafer starts per month, but management has indicated that figure could quadruple as the facility ramps.
Even more surprising are third-party performance estimates suggesting Intel’s 18A process may outperform comparable nodes from both TSMC and Samsung on certain metrics.
Demand is already outpacing supply
One under-the-radar signal that Intel’s turnaround is real came straight from management.
On its October earnings call, the company acknowledged it was supply constrained and unable to meet all third-quarter demand for its most advanced products.
That’s a very different problem than Intel investors have grown used to.
Valuation looks stretched
Wall Street remains cautious. The median 12-month price target of about $40 implies only modest upside from current levels, reflecting skepticism after such a strong 2025 run.
On the surface, that caution seems justified. Intel trades at an eye-popping trailing earnings multiple, and even its forward P/E remains elevated compared to historical norms. But those figures obscure the transition Intel is making.
Analysts expect earnings growth to accelerate further over the next couple of years as utilization improves and high-value chips scale.
In other words, Intel isn’t expensive because earnings are stagnant, it’s expensive because earnings are inflecting.
Will Intel Dethrone TSMC?
Intel doesn’t need to dethrone TSMC overnight to justify further gains. It just needs to prove that its manufacturing roadmap is finally credible.
With 18A production ramping, domestic fabs coming online, and Nvidia now aligned as both a partner and shareholder, Intel has assembled the strongest competitive setup it’s had in over a decade. If execution holds, 2026 could mark the moment when Intel stops talking about a turnaround, and starts delivering one.