By Therese Poletti

Photo: Getty Images

Shares of Intel Corp. are surging again Thursday — and the recent strong rally could make them even more appealing.

The beleaguered chip stock is up 0% in Thursday trading and ahead 29.2% over its current four-session winning streak. That could make for Intel’s INTC best four-day run since the period that ended Nov. 2, 1987, when it rose 38.3%, according to Dow Jones Market Data.

Intel began to see particular momentum early Tuesday, when Vice President J.D. Vance talked up semiconductor manufacturing in the U.S. as important to the new administration, with the view among investors that Intel, as the biggest U.S. chip maker, would be a huge beneficiary.

“A Trump administration is going to be extremely committed to making sure Intel is successful in building out domestic fabs,” said Dan Morgan, a senior portfolio manager at Synovus.

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There’s also speculation that the government could help foster a manufacturing partnership between Taiwan Semiconductor Manufacturing Co. TSM and Intel, potentially in the form of a joint venture that could see TSMC make an investment in Intel’s foundry business.

“Our view has been that [Intel’s] core server and PC businesses will no longer generate enough growth to absorb the significant costs for leading-edge fabs, and building a foundry business to drive additional volume will take too long and be too uncertain for investors to continue to finance such a strategy,” Wolfe Research analyst Chris Caso wrote on Thursday.

A partnership between TSMC and Intel “would represent a way out of this issue,” he said, but added that it “does however appear difficult to implement.”

Intel was a popular short bet among chip-focused hedge-fund managers, but now the company could become the “Golden Boy Turnaround Long Idea for 2025,” wrote Jordan Klein, a tech-sector specialist at Mizuho Securities, in a sales commentary note to clients on Thursday.

The thinking is that because long-only investors don’t have overweight positions in Intel’s stock, they may need to add Intel positions “in efforts to avoid missing one of the few winners” within the semiconductor sector so far this year, Klein said.

Intel shares are still down 43% over a one-year span and 63% over five years.

An Intel spokesperson declined to comment on the stock’s rise or on any of the speculation around it.

Vance’s comments at an artificial-intelligence summit in Paris earlier this week are leading some analysts to believe that the Trump administration will not only continue to support the U.S. Chips Act, which is providing funding to build new chip plants in the U.S., but that it would also try to convince more chip companies to use Intel’s manufacturing plants as customers. Intel has separated out its foundry/manufacturing business, but so far it has not won any marquee customer contracts to help it become profitable and further drive its revenue growth.

“They are definitely going to get more contracts,” said G. Dan Hutcheson, a vice chair at semiconductor-research firm TechInsights, adding that many chip makers are currently evaluating and comparing TSMC’s latest process with Intel’s, which will take time. The bulk of U.S. chip companies, apart from Intel and Micron Technology Inc. MU contract out their manufacturing to others, mostly to TSMC in Taiwan.

“The decision-making process is in place, because you are looking at the second half of 2026 before the real volume starts,” he said, referring to the next-generation manufacturing process at Intel, which is called 18a, and at rival Taiwan Semiconductor Manufacturing Corp., 2330, called 2nm, or two-nanometer, referring to the node manufacturing size.

Another factor contributing to the stock’s rise is a growing view that Intel’s 18a process could actually put it in the leadership position again over TSMC. Earlier this week, a paper written by another analyst, Scotten Jones, also at TechInsights, compared Intel’s 18a to TSMC’s 2nm and concluded that Intel’s has better performance.

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“In terms of performance, we believe Intel 18A is the leader,” Jones wrote in a paper that has also been published on the SemiWiki forum. Hutcheson confirmed that the paper is from TechInsights. A link to the paper was also published on X, where some investors were pointing to it as contributing to Intel’s rise.

Jones wrote that while TSMC’s early yields from its initial manufacturing tests were promising, they currently are coming at a high cost. “The early yield reports appear promising, but the reports of $30,000/wafer pricing do not in our opinion represent acceptable value for the process and may present an opportunity for Intel and Samsung to capture market share,” he concluded.

Not everything is starting to come up roses at Intel at the moment. The company is still looking for a CEO to replace Pat Gelsinger, who was abruptly pushed out late last year as Wall Street grew impatient with his long-term strategy of keeping Intel as both a maker of PC and server chips, while becoming a larger manufacturer for others.

“That is going to take a while, finding someone with both product and foundry experience. There is almost no one out there qualified [in both areas] other than people from Intel,” Hutcheson said, adding that for now, things are running in place really well.

While the bulk of the sentiment on Wall Street is currently being fueled mostly by extrapolation and speculation, investors appear to be using every factoid available right now to justify their fear of missing out.

Source: Marketwatch