Intel (INTC) May Kill 18A in Billion-Dollar Bid for Apple, Nvidia
Tan, who took charge in March, noted that 18A, which was championed by former CEO Pat Gelsinger, has struggled to win new external customers.
Warning! GuruFocus has detected 7 Warning Signs with INTC.
Under the potential shift, Intel Foundry would accelerate development of its 14A node, where it believes it can better rival Taiwan Semiconductor Manufacturing Co (NYSE:TSM), and court major clients such as Apple (NASDAQ:AAPL) and Nvidia (NASDAQ:NVDA).
Sources say shelving external sales of 18A and its 18A?P variant could force Intel to take a one?time write?off of several hundred million to potentially over a billion dollars.
The board is not expected to decide on the matter until its fall meeting, reflecting the complexity and financial stakes involved.
Intel declined to comment on what it described as market speculation, adding that Intel itself remains the primary user of 18A, with Panther Lake processors built on the node slated for production later in 2025.
The company will also honor 18A commitments to Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) under existing agreements.
Investors will be watching whether a pivot to 14A can deliver the performance gains and customer wins Tan is targeting.
Based on the one year price targets offered by 32 analysts, the average target price for Intel Corp is $21.20 with a high estimate of $28.30 and a low estimate of $14.00. The average target implies a downside of -7.20% from the current price of $22.85.
Based on GuruFocus estimates, the estimated GF Value for Intel Corp in one year is $23.86, suggesting a upside of +4.42% from the current price of $22.85. Gf value is Gurufocus' estimate of the fair value that the stock should be traded at. it is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. For deeper insights, visit the forecast page.
This article first appeared on GuruFocus.
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