In 2025, Intel stock produced one of the most spectacular comebacks on Wall Street, gaining over 80 percent during the year and doing better than most of the giants in the technology industry. This rally was preceded by some major headline events, such as a change in leadership, new government support, and marquee associations with Nvidia and SoftBank.
However, in spite of the good stock performance, analysts warn that the long term turnaround of Intel is not yet certain. The business of its core manufacturing, which has historically been the source of its power, remains at a disadvantage, and investors have the best reason to prognosticate hope rather than perennial issues of organization.
A Year of Momentum for Intel Shares
Intel went into 2025 with a cloud of doubt. Decades of execution follies, delays in manufacturing and lost market share had eroded confidence in the legendary chipmaker. However, the sentiment changed as the year went by.
Lip-Bu Tan became the chief executive of the company in March after the board voted to force out its former CEO Pat Gelsinger late last year. The entry of Tan changed the tonal shift that was favorable to investors. Analysts pointed to his realistic demeanor, emphasis on cost control, and far-reaching industry contacts, which contribute to regaining some fidelity to the Intel turnaround story.
Meanwhile, Intel gained the prominent support of the U.S. government as part of the wider action by Washington to reinforce semiconductor production within the US. Further investments by Nvidia and SoftBank served to reassure that Intel was still a strategic part of the global chip industry.
Those announcements spurred a sharp upsurge in Intel shares that pushed the stock far, far above gains in competitors such as Advanced Micro Devices and even to the top of the larger “Magnificent Seven” team of the year.
A Legacy Built on Innovation
The impact that Intel had on present-day computing is hard to overestimate. The company was the first in the world to develop a microprocessor, and it also developed the x86 architecture, which forms the backbone of numerous devices today. Co-founder Gordon Moore made the famous Moore Law, where the growth of computing power was exponential and became the guiding principle of the semiconductor industry for decades.
However, unlike many of its rivals, Intel continued to do its manufacturing when most of the industry adopted a fabless model. NVIDIA and AMD companies outsource chip manufacturing to chip production factories like Taiwan Semiconductor Manufacturing Company (TSMC), and Intel still designs and makes its own chips.
That vertically integrated model had been a competitive advantage in years. With time, though, execution crises and slow investments enabled competitors to lag behind.
Manufacturing Remains Intel’s Biggest Challenge
Intel’s manufacturing arm, now known as Intel Foundry, remains the company’s most pressing concern. Once a source of pride, the division has fallen behind TSMC in both scale and technological leadership.
As Intel’s processors lost performance advantages, competitors captured market share in key segments such as data centers, laptops, and personal computers. That erosion reduced the internal demand needed to support Intel’s massive manufacturing footprint, weakening the economics of the business.
Former CEO Pat Gelsinger attempted an ambitious turnaround by opening Intel’s foundries to external customers. The strategy required enormous capital investment and carried significant execution risk. Instead of reassuring investors, the plan raised concerns about cash burn, long payback periods, and the lack of guaranteed customers.
Even four years later, Intel has not seen a large third-party customer to give it foundry credibility. According to analysts, such a deal would still be vital in demonstrating the sustainability of the manufacturing business in the long run.
A Change in Leadership, Not Strategy
The hiring of Lip-Bu Tan has not radically transformed Intel’s strategic direction, but it has shifted the way Intel conveys its objectives. Market observers believe Tan has been much more realistic and has accepted challenges, but at the same time, focused on discipline in operations.
A reduced cost-cutting strategy and stricter capital management have been a welcome relief to some investors who were concerned about the heavy outlay at Intel. Tan had long-standing ties throughout the semiconductor industry, which also gave people hope that someday Intel might be able to lure significant foundry customers.
Nevertheless, analysts warn that hope will not bridge the success gap with rivals. Intel needs to provide continuity in the implementation, achieve manufacturing targets, and show that it can provide chips in quantity and at competitive yields.
Stock Gains Reflect Expectations, Not Results
Despite the impressive rally, Intel’s stock gains largely reflect improving expectations rather than concrete financial improvements. The manufacturing unit continues to lose money, and Intel’s overall profitability remains under pressure.
Morningstar analysts note that while Intel exits 2025 with renewed relevance, the company has yet to secure the type of transformative deal that would firmly establish it as a leading contract manufacturer. Until that happens, Intel’s foundry business remains a long-term bet rather than a proven success.
In the meantime, competitors are on the rise. TSMC is the market leader, and AMD and Arm-based chipmakers continue to gain market share in the major computing segments. The growth of artificial intelligence has also accelerated the competition, which puts Intel under the pressure of trying to keep up with competitors that already have taken control of artificial intelligence-related workloads.
Looking Ahead to 2026
As Intel heads into 2026, investors face a familiar dilemma. The company’s history, scale, and strategic importance offer reasons for optimism. Government support and industry partnerships provide additional tailwinds.
But the road ahead remains long. Intel must translate improved sentiment into operational results, win external customers for its manufacturing business, and regain technological leadership in a fiercely competitive market.
For now, Intel’s resurgence in 2025 stands as a reminder of how quickly narratives can shift on Wall Street. Whether that momentum marks the beginning of a sustained turnaround or simply a pause in a longer struggle will depend on execution — the one factor Intel can no longer afford to get wrong.