Few companies have had a year like Intel’s 2026. In six months it went from its best month in more than half a century to its worst day since the 1970s, and the question at the heart of both moves never changed: can it win outside customers for its chip factories?

The boom

The US government took a 10% stake in Intel in August 2025 for $8.9 billion, mostly from CHIPS Act grants. For a while it looked like a great trade.

  • April 7: Intel said it would join Terafab, Elon Musk’s chipmaking project, which aims for enormous amounts of AI compute. Intel didn’t disclose its role; Musk later said Tesla planned to use Intel’s 14A process.
  • April 24: first-quarter results sent the stock up 24% in a day.
  • April overall: the shares rose 114%, Intel’s best month in 55 years on Nasdaq, taking its market value past $470 billion, according to CNBC. The government’s stake was worth more than $40 billion.

Chief executive Lip-Bu Tan’s pitch was that AI agents were driving new demand for CPUs, not just GPUs. Intel says data-centre CPU demand now exceeds supply, and data-centre revenue grew 78% to $7.3 billion in the third quarter.

The foundry problem

Intel’s leading process, 18A, is in high-volume production in Arizona, but for Intel’s own chips. On July 21 it named its first foundry customer under Tan, security company Fortinet, but on the older Intel 4 process. A flagship external customer for 18A or 14A has not been announced. Tan says “a couple” will be named in the next two quarters.

The bust

On October 29 Intel guided fourth-quarter revenue to $15 billion to $16 billion, well below the $17.1 billion analysts expected, with adjusted earnings of 25 cents a share against 43 cents. The outlook reflected weaker PC demand, partly due to soaring memory costs, and an October explosion at its fab in Israel that killed two workers and is expected to cost about $600 million over two quarters.

On October 30 the shares fell 29%, their worst day since the 1970s, wiping about $12 billion off the value of the government’s stake. For October as a whole Intel was down 45%, a record monthly drop.

Why it matters

  • The only US contender. Intel is the only US-based company trying to compete at the leading edge of contract chipmaking with TSMC and Samsung. With taxpayers as shareholders, its foundry is industrial policy as much as business.
  • Promises versus customers. The stock’s swings show the market is still pricing Intel’s foundry on announcements. One large external 14A customer would change the story; until then, it remains a bet.
  • CPUs matter again. If agentic AI keeps driving server CPU demand, Intel’s core business has a tailwind regardless of the foundry.

Former Intel board member David Yoffie told CNBC the company should spin off the foundry. That debate will intensify if no customer arrives soon.

Sources

  1. TechCrunch: Intel signs on to Elon Musk’s Terafab chips project (Apr 7, 2026)
  2. CNBC: Intel has best month ever (Apr 30, 2026)
  3. CNBC: Intel Foundry lands Fortinet as first customer (Jul 21, 2026)
  4. CNBC: Amazon and Intel earnings, Big Tech AI spending concerns (Oct 30, 2026)
  5. CNBC: Intel Foundry faces critical test after October plunge (Nov 2, 2026)

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