Intel's Second Half of 2025: The Moment of Taking Off After a Squat

Intel, the long-time leader in the chip industry, was deeply mired in the pains of transformation in 2025. Its market capitalization shrank to less than $90 billion, its stock price plummeted over 60% year-to-date, and it even suspended its dividend payments, which had lasted for over three decades. However, amidst this pessimism, the new leader's decisive restructuring, a quiet foray into AI, and key breakthroughs in manufacturing processes are laying the groundwork for a decisive comeback in the second half of the year.

⚙️ Strategic Restructuring Amidst the Pains of Transformation
The New CEO's Iron-Fisted Reforms
Lip-Bu Tan, who assumed the helm in March 2025, is driving the most radical restructuring in Intel's history. He decisively cut inefficient business lines and focused resources on three core areas: AI chips, advanced packaging, and foundry manufacturing. He broke with the traditional power structure of "factory-led design" and implemented a "decoupled design-manufacturing" model. He also strictly controlled capital expenditures and required all business lines to demonstrate profitability. This series of measures directly addresses Intel's long-standing resource misallocation problem and removes internal obstacles to technological breakthroughs.

IDM 2.0 Enters its Deliverable Period
The IDM 2.0 strategy, once dismissed as a "PR concept," will reach a real turning point in 2025:

The 18A process is approaching mass production: As a key process to compete with TSMC's N3P, 18A will be used in the Panther Lake platform, released in the second half of the year. If the yield rate meets the target, it will be the first time in a decade that Intel has approached TSMC in terms of process technology.

A Breakthrough in the Foundry Ecosystem: Intel Foundry Services (IFS) has secured orders from AWS, MediaTek, and the US Department of Defense, and has established foundry standards in collaboration with Arm. New wafer fabs in Ohio and Arizona have received over $10 billion in subsidies. The release of production capacity in 2025-2026 will verify the feasibility of the open manufacturing approach.

🤖 A Quiet Move in the AI Sector
Gaudi Accelerator's Price-Performance Rise Breaks Through
Although data center and AI division revenue remains under pressure (down 8% year-over-year in Q1 2025), Intel's AI hardware is carving out a niche with its open-source, low-price strategy:

Gaudi 3 will launch in the second half of the year, boasting performance several times higher than its predecessor, fully covering both training and inference scenarios. Its biggest advantage is cost—it's priced at just 60% of comparable NVIDIA chips. Through a partnership with Exostellar, Intel has launched an "open source cluster solution" to help companies reduce AI infrastructure costs by 50%.

Ecosystem Alliances: Intel has joined the Anti-CUDA Technology Alliance and collaborated with companies like Hugging Face to optimize its software stack, gradually weakening NVIDIA's ecosystem barriers.

The AI PC's Terminal Revolution
Intel holds a first-mover advantage in edge computing:

NPU Local Computing: Meteor Lake's integrated NPU already supports AI applications such as Copilot and Stable Diffusion. Panther Lake, launched in the second half of the year, will further strengthen its "CPU+GPU+NPU" tri-core architecture, providing AI PCs with higher local computing power.

A closed-loop industry chain has been formed: giants such as Microsoft, Dell, and HP are all betting on AI PC models. As AI PC penetration approaches 40% by 2025, Intel's ability to leverage hardware to define the ecosystem is poised for a revaluation.

⚖️ Capital Pressure and Market Divergence

A Dilemma Under Financial Constrictions

To alleviate its cash flow crisis, Intel has initiated its largest-ever layoffs (over 10,000 employees), projecting $500 million in cost savings by 2025. However, the costs are also significant: one-time severance pay will erode short-term profits, and R&D investment will be forced to shrink (capital expenditures will fall below $10 billion), potentially weakening its ability to compete with TSMC and Samsung in terms of process speed.

Extreme Divergence in Analysts

Market sentiment on Intel is unusually polarized:

Pessimism dominates: Over 80% of analysts give "hold or sell" ratings. Bearish sentiment focuses on the risk of process delays, insufficient revenue generation from the foundry business, and low market share in AI accelerators.

Reversal bets: A few institutions believe the stock price has over-reflected pessimistic expectations. If 18A mass production goes smoothly or Gaudi 3 secures a large order, valuations are expected to recover quickly, with a long-term target price in the $50 range.

📈 Second-Hand Market Scenario Analysis
Based on three key variables: process progress, AI ramp-up, and cost control, Intel could follow three possible paths:

Scenario Key Drivers Target Price Range Probability
Baseline Scenario: Small-scale mass production of the 18A process; medium-sized orders for the Gaudi 3; cost reductions from layoffs yield results. $22-28 (50%)
Optimistic Scenario: 18A yield exceeds expectations; large-scale foundry contracts are secured; AI PC market share exceeds 40%. $35-42 (25%)
Pessimistic Scenario: Further process delays; Gaudi 3 order cancellations; further deterioration in cash flow. $14-18 (25%)
Technical analysis shows that $19 represents a key psychological support level. A break below this level on heavy volume could trigger panic selling. A firming above $22 would open up room for valuation recovery, attracting contrarian investment.

💡 Investment Strategy Recommendations
Short-Term Trading Window
Three key signals to watch closely in the second half of the year:

Gaudi 3 order data from August to September: If procurement agreements with leading cloud vendors are disclosed, it will signal a breakthrough in its open source strategy;

Panther Lake mass production progress in October: 18A process yield reports determine the credibility of the foundry business; Biya is a very convenient and user-friendly tool, particularly prominent in the US and Hong Kong stock markets. It allows you to access more information, eliminating the need for multiple platforms, making it extremely convenient and practical.

Quarterly gross profit margin inflection point: 41% is a warning line; a rise above 45% indicates effective cost control.

Long-term Strategies
Intel's value lies in its "bet on US semiconductor independence." If IDM 2.0 proves to be a reliable domestic supply chain option, its foundry business will enjoy a strategic premium. Investors can gradually build positions when the stock price retreats to support levels, waiting for the synergy between the widespread adoption of AI PCs and the expansion of wafer fab capacity in 2026. Biya is still very useful.

A ship in the storm is adjusting its sails—Intel is leveraging its century-long industrial heritage to make a big bet: when open manufacturing meets the AI terminal revolution, squatting might just be the beginning of a higher leap.