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Business Insider
03-07-2025
- Business
- Business Insider
Intel Stock: What Effect Will Foundry Strategy Shift Have? Morgan Stanley Weighs In
After years of lagging behind rivals like TSMC, Intel (NASDAQ:INTC) has been trying to re-establish itself as a leading chip manufacturer – not just for its own products, but as a foundry for others as well. Don't Miss TipRanks' Half-Year Sale Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. Its foundry strategy has so far revolved around its 18A process node, which was originally expected to launch next year. The 18A node is the fifth and final step in former CEO Pat Gelsinger's ambitious 'five nodes in four years' roadmap – a plan designed to rapidly reclaim process technology leadership. At one point, 18A was billed as the node that would give Intel 'unquestioned leadership' in the space. On the product side, Intel's next-generation PC chips, known as Panther Lake, are expected to arrive in the second half of this year, built on the 18A process. Server chips under the Clearwater Forest line are slated for 2026, with the possibility of onboarding external foundry customers sometime later next year. However, that focus might now be shifting. According to a Reuters report that cites 'unnamed Intel sources,' the company is considering pulling back on its foundry plans for the 18A process node in order to shift resources toward its next-generation node, known as 14A. That process is expected to enter risk production next year, with internal use slated for 2027. If true, the move could result in a writedown potentially amounting to hundreds of millions – or even billions – of dollars. The report suggests Intel would still fulfil limited 18A foundry commitments it has already made, but would largely pivot its foundry strategy to 14A going forward. While it's not clear yet whether the report is true, Morgan Stanley analyst Joseph Moore believes that shifting the foundry focus to 14A wouldn't be 'economically disruptive, given low 18A expectations.' To some extent, Intel had already dialed back its ambitions for 18A, so the potential impact from the reported shift – and any associated writedown – appears 'minimal' to Moore. Even under the most optimistic outlook, prospective foundry customers were expected to start with small-scale projects to evaluate Intel's capabilities, meaning the capital tied to those efforts was always going to be modest. Management has consistently stressed that reaching breakeven on the foundry business doesn't rely heavily on external customers in the near term. 'So for 2025/26, none of this will have much economic impact,' Moore opined. That said, while the initial foundry projects were always expected to be small in scale, pushing their start out by a year or two would also delay any meaningful volume ramp. 'We are generally pessimistic about foundry contributing to profits in an investable time frame anyway, so it doesn't change our view that much, but we can see why foundry optimists saw this as a negative,' Moore said on the matter. And while Moore sees the value in Intel, he shares CEO Lip Bu Tan's view that this is a 'long path to recovery.' Accordingly, Moore stays on the INTC sidelines for now, maintaining an Equal-weight (i.e., Neutral) rating and $23 price target, suggesting the shares are fully valued. (To watch Moore's track record, click here) 25 other analysts join Moore on the fence while 1 Buy and 4 Sells can't alter a Hold consensus rating. Going by the $21.35 average target, a year from now, shares will be changing hands for a 5% discount. (See Intel stock forecast) To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
Yahoo
30-05-2025
- Business
- Yahoo
2 Brilliant Stocks to Buy With $100 and Hold for 5 Years
Intel's focus on aggressive cost-cutting and edge AI help position it as a turnaround story. Toast is improving its revenue mix and increasing client adoption of its AI-powered tools. 10 stocks we like better than Intel › The U.S. equity markets have been quite turbulent in 2025, affected by escalating geopolitical pressures, protectionist tariffs, and high interest rates. Not surprisingly, investors are shying away from high-growth, high-risk stocks and moving toward defensive plays. Yet, this period of volatility also offers long-term investors an opportunity to buy exceptional stocks at reasonable prices. All that is needed is a modest sum of $100, not required to pay for immediate needs. Buying even one of these two fundamentally strong businesses below can position you on a multi-year growth trajectory. Here's why. Intel's (NASDAQ: INTC) recent earnings performance for the first quarter was mixed. While revenue and earnings surpassed consensus estimates, investors were disappointed by the company's weak guidance for the second quarter of fiscal 2025. Despite this, many factors are working in Intel's favor, especially with the company hiring Lip-Bu Tan, who's credited with the turnaround of Cadence Design Systems, as its new CEO. The company has plans to aggressively reduce operating expenses to $17 billion in fiscal 2025, $500 million lower than the previous estimate, and to $16 billion in fiscal 2026. Intel also focuses on better asset utilization to reduce capital expenditures (capex) from the last estimate of $20 billion to $18 billion. Beyond cost savings, Intel is also gearing up to become a significant beneficiary of the ongoing AI revolution. While Nvidia and Advanced Micro Devices are ahead in the AI race, Intel is now developing full-stack AI solutions to enable the next wave of AI-powered computing. The company aims to improve accuracy, power efficiency, and security in running next-generation enterprise workloads such as reasoning models, physical AI, and agentic AI. Intel is also focusing on the edge AI market, which is estimated to grow from $53.5 billion in 2025 to $82 billion in 2030. Gartner expects half of the enterprise-managed data to be processed outside data centers or the cloud, in manufacturing plants, retail outlets, and healthcare facilities. These applications require low power and efficient architectures in areas where the company has excelled. Intel's 18A manufacturing process technology has also become a significant competitive advantage, thanks to its higher performance and improved power efficiency. With this technology, the company has built an AI PC client processor called Panther Lake and a server processor called Clearwater Forest. By demonstrating successful "booting of operating systems without additional configurations or modifications," these processors have highlighted the strength of 18A process technology. Subsequently, Intel Foundry has now emerged as an underappreciated asset in the company's portfolio. It's added two companies in the defense industry, while industry reports claim that Amazon and Microsoft are also exploring partnerships for 18A capabilities. Furthermore, Intel Foundry also engages with customers for Intel 14A process technology (a successor to 18A). Intel shares are trading 1.7 times sales, lower than their five-year average of 2.3. Hence, considering the company's many tailwinds and bargain valuation, the stock appears a smart buy now. In the past few years, Toast (NYSE: TOST) has transformed itself from a basic mobile payment application company into a complete operating system for the restaurant industry, including kitchen operations, restaurant and menu services, inventory tracking, payment processing, multilocation management, customer engagement, and data analytics. Toast currently serves 140,000 restaurant locations in the U.S., only 10% of the 1.4 million locations across its customer segments. While the company's current stronghold is in the U.S. small-to-medium-sized business market, management also focuses on enterprise customers, food and beverage retail, and international market clients. This indicates massive room for growth in the existing markets. Toast has leveraged advanced AI-powered technologies to boost average order volume and ensure effective advertising. The company has launched an AI engine, ToastIQ, which combines AI, restaurant expertise, and proprietary data. ToastIQ's features help clients with business insights, troubleshooting, marketing, employee scheduling, and pricing. The company's recent financial and operational performance for the first quarter has been impressive. Revenue was up 24.4% year over year to $1.34 billion, while operating income was $43 million, a dramatic improvement from the $56 million loss in the same period last year. Subscription revenue increased by 38% to $209 million. This shift toward more visible, sticky, and higher-margin subscription revenues is a positive. The company also reported free cash flows of $69 million -- an impressive feat, since the first quarter is typically the seasonally weakest. Toast added over 6,000 net new locations to reach approximately 140,000 total locations in the first quarter. This also included major enterprise wins, which are strong positives, as they usually demonstrate significant annual recurring revenues and lower churn rates. Toast trades at about 5 times sales, higher than its three-year average of 3.8. Although the valuation may appear expensive, it seems justified for a company with a huge addressable market, strong financial and operational metrics, and a broad customer base. Hence, the stock looks like a worthwhile buy now. Before you buy stock in Intel, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Intel wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,389!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $830,492!* Now, it's worth noting Stock Advisor's total average return is 982% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Manali Pradhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, Cadence Design Systems, Intel, Microsoft, Nvidia, and Toast. The Motley Fool recommends Gartner and recommends the following options: long January 2026 $395 calls on Microsoft, short August 2025 $24 calls on Intel, and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. 2 Brilliant Stocks to Buy With $100 and Hold for 5 Years was originally published by The Motley Fool
Yahoo
16-05-2025
- Business
- Yahoo
Intel says foundry business won't break even until 14A in 2027
When you buy through links on our articles, Future and its syndication partners may earn a commission. Currently, Intel's Foundry division loses billions every quarter as it invests heavily in new process technologies and production capacity. However, the company hopes that the Intel Foundry unit will break even sometime in 2027, which will coincide with the rollout out Intel's 14A manufacturing technology and production start on 18A-P node. Intel this week reaffirmed that the first product made on its 18A (1.8nm-class) fabrication process, the client PC processor (codenamed Panther Lake), will hit the market late this year and will ramp next year. The manufacturing technology will also be adopted for Xeon 'Clearwater Forest' and some third-party products, but from Intel's Foundry business perspective, 18A is will be a proof-of-concept for external clients. If this production node is a success, more potential customers will adopt its successors, including 18A-P, and 14A (1.4nm-class). "I think we do need to see more external volume come from 14A versus versus 18A, said David Zinsner, chief financial officer of Intel, at the J.P. Morgan Global Technology, Media and Communications Conference. "We have […] a bunch of bunch of potential customers, and then we get test chips, and then some customers fall out in the test chips, and then there is a certain amount of customers that kind of hang in there. So, committed volume is not significant right now, for sure. But, you know, I think we have got to partly prove ourselves a little bit with our own product and eat our own dog food here, and then […] we start to see some engagement around customers." Zinsner admitted that if the company choses to use High-NA EUV lithography with its 14A process technology — as it plans to at the moment — its costs will go up initially. Intel hopes that advantages enabled by the new fab tools will outweigh those higher costs. Like other contract chipmakers, Intel does not comment on its clients. The company also intends to produce more of its own silicon in house with its Panther Lake and Nova Lake CPUs, which will improve Intel's margins and its utilization of production capacities. As a result, Intel hopes that its Foundry unit will break even in 2027 and will be profitable from then on. "We still feel on track to to hit breakeven sometime in 2027," Zinsner said. "You know, I think when we committed to it in 2024, we said, 'it is going to be somewhere between 2024 and 2030, most people kind of settled in that that must mean 2027, and that is generally kind of what we are thinking is we can be breakeven." To break even, Intel Foundry only needs low- to mid-single-digit billions in annual external revenue, according to Zinsner. Most of 18A's volume will come from Intel's internal products, while 14A will require more external adoption. Intel's breakeven strategy also includes revenue from advanced packaging, mature nodes (like Intel 16), and partnerships with UMC and Tower. The company will continues to follow its 'smart capital' model, balancing internal and external wafer sourcing, and expects Foundry to compete for internal product demand to ensure efficiency and cost Tom's Hardware on Google News to get our up-to-date news, analysis, and reviews in your feeds. Make sure to click the Follow button.
Yahoo
16-05-2025
- Business
- Yahoo
Intel says foundry business won't break even until 14A in 2027
When you buy through links on our articles, Future and its syndication partners may earn a commission. Currently, Intel's Foundry division loses billions every quarter as it invests heavily in new process technologies and production capacity. However, the company hopes that the Intel Foundry unit will break even sometime in 2027, which will coincide with the rollout out Intel's 14A manufacturing technology and production start on 18A-P node. Intel this week reaffirmed that the first product made on its 18A (1.8nm-class) fabrication process, the client PC processor (codenamed Panther Lake), will hit the market late this year and will ramp next year. The manufacturing technology will also be adopted for Xeon 'Clearwater Forest' and some third-party products, but from Intel's Foundry business perspective, 18A is will be a proof-of-concept for external clients. If this production node is a success, more potential customers will adopt its successors, including 18A-P, and 14A (1.4nm-class). "I think we do need to see more external volume come from 14A versus versus 18A, said David Zinsner, chief financial officer of Intel, at the J.P. Morgan Global Technology, Media and Communications Conference. "We have […] a bunch of bunch of potential customers, and then we get test chips, and then some customers fall out in the test chips, and then there is a certain amount of customers that kind of hang in there. So, committed volume is not significant right now, for sure. But, you know, I think we have got to partly prove ourselves a little bit with our own product and eat our own dog food here, and then […] we start to see some engagement around customers." Zinsner admitted that if the company choses to use High-NA EUV lithography with its 14A process technology — as it plans to at the moment — its costs will go up initially. Intel hopes that advantages enabled by the new fab tools will outweigh those higher costs. Like other contract chipmakers, Intel does not comment on its clients. The company also intends to produce more of its own silicon in house with its Panther Lake and Nova Lake CPUs, which will improve Intel's margins and its utilization of production capacities. As a result, Intel hopes that its Foundry unit will break even in 2027 and will be profitable from then on. "We still feel on track to to hit breakeven sometime in 2027," Zinsner said. "You know, I think when we committed to it in 2024, we said, 'it is going to be somewhere between 2024 and 2030, most people kind of settled in that that must mean 2027, and that is generally kind of what we are thinking is we can be breakeven." To break even, Intel Foundry only needs low- to mid-single-digit billions in annual external revenue, according to Zinsner. Most of 18A's volume will come from Intel's internal products, while 14A will require more external adoption. Intel's breakeven strategy also includes revenue from advanced packaging, mature nodes (like Intel 16), and partnerships with UMC and Tower. The company will continues to follow its 'smart capital' model, balancing internal and external wafer sourcing, and expects Foundry to compete for internal product demand to ensure efficiency and cost Tom's Hardware on Google News to get our up-to-date news, analysis, and reviews in your feeds. Make sure to click the Follow button. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15-03-2025
- Business
- Yahoo
Intel reaches 'exciting milestone' for 18A 1.8nm-class wafers with first run at Arizona fab
When you buy through links on our articles, Future and its syndication partners may earn a commission. While the whole market was looking at the appointment of Lip-Bu Tan as Intel chief executive, there was another major development at the company this week: The first 18A (1.8nm-class) wafers are running around Intel's Arizona fab. Intel's Fab 52 and Fab 62 in Arizona are high-volume production facilities, so running 18A fabs there is a major milestone for the company. "Exciting Milestone for Intel 18A," wrote Pankaj Marria, an engineering manager at Intel, in a LinkedIn post that was eventually hidden but captured by @Mojo_flyin on X. "Proud to be part of the Eagle Team, leading the way in bringing Intel 18A technology to life! Our team was at the forefront of running the initial lots right here in Arizona, marking a key step in advancing cutting-edge semiconductor manufacturing." Up until recently, Intel processed wafers on its 18A production technology at its site near Hillsboro, Oregon, where new manufacturing processes are developed. While the company can volume produce chips in Oregon as well, porting this new fabrication process to a brand-new fab in Arizona is indeed a milestone for the company. For now, the company is running test wafers to ensure that the fabrication process transfer is a success, but eventually the fab will start running actual chips for commercial products. Intel is set to mass produce compute chiplets for its upcoming codenamed Panther Lake processors on 18A technology later this year. Eventually, Intel's 18A production node will be used to make Intel's Xeon 7 codenamed Clearwater Forest processor for datacenters. Intel pins a lot of hope on the upcoming 18A fabrication process. The manufacturing technology relies on gate-all-around RibbonFET transistors that promise to increase performance and cut down power consumption. It also features backside power delivery, which is meant to ensure steady power delivery to power-hungry processors and increase transistor density by decoupling signal and power wires within a chip. "This achievement is a testament to the hard work, innovation, and dedication of everyone involved. The Eagle has landed, and this is just the beginning! Developed and Made in America the world's smallest node," Marria added. Sign in to access your portfolio
