Strategic Partnerships Fuel Intel's Turnaround

Intel Company Overview

Santa Clara, CA-based Intel Corporation (INTC) is among the world’s largest semiconductor companies and is a primary supplier of microprocessors and chipsets. The Zacks Rank #3 (Hold) stock is gradually reducing its dependence on its PC-centric business by transitioning into fast-growing data-centric businesses, such as AI and autonomous driving.

Intel is gaining solid traction in the red-hot AI infrastructure market. It has introduced Intel Core Ultra Series 3 processors (codenamed Panther Lake), which are designed to power a broad spectrum of consumer and commercial AI PCs, gaming devices, and edge solutions. The company also announced Xeon 600 processors for workstations, with up to 86 cores and faster memory and PCIe for better performance.

Intel’s Strategic Partnerships

After falling behind in the AI race and becoming a distressed legacy giant, critical strategic partnerships are helping Intel to turn its business around. The U.S Treasury currently holds roughly 10% of INTC shares. As a strategic partner to the U.S. government, INTC investors benefit from a valuation floor and government backstop. Meanwhile, Intel has also formed a partnership with its once-bitter rival NVIDIA (NVDA). NVDA recently invested $5 billion into Intel. In return, Intel will help NVIDIA with advanced packaging and provide capacity in its Arizona and Ohio manufacturing facilities. Additionally, the two are co-developing custom x86 CPUs for NVIDIA’s data center platforms.

Intel’s Fundamental Turnaround

After several years of negative growth, Intel is expected to produce positive top-and-bottom-line-growth over the next few years. In fact, Zacks Consensus Estimates expect EPS to surge 99.17% in 2027.

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INTC Stock: Relative Strength & Bullish Price Action

INTC shares are exhibiting fabulous relative strength despite the recent geopolitically driven market turmoil. Year-to-date, INTC shares are up 34% while the S&P 500 Index is red. As soon as the market pressure is alleviated, INTC shares are likely to be even stronger.

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Additionally, INTC shares formed a weekly bullish engulfing candle. The price action suggests a breakout of its multi-week base structure is imminent.

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Bottom Line

By leveraging its domestic manufacturing strength and pivoting toward AI, Intel has turned its business around. For investors, the combination of a massive 2027 earnings forecast and the recent breakout in price action suggests that Intel is no longer the underdog of the semiconductor world, but a revitalized titan.

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This article originally published on Zacks Investment Research (zacks.com).

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