(Bloomberg) — Shares of Intel Corp. have soared recently, fueled by a series of notable financial partnerships, yet the influx of capital has not resolved one of the company’s most pressing issues—its unprofitable chip manufacturing operations.
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Intel’s recent alliance with Nvidia Corp. has propelled the company’s stock prices upward, achieving a remarkable 48% increase this year that has added over $50 billion to its market capitalization. This new arrangement, which promises to bring in $5 billion to Intel through a share sale, aligns with U.S. President Donald Trump’s initiative to expedite an $8.9 billion funding plan for Intel, alongside a $2 billion investment from SoftBank Group Corp.
However, these financial arrangements do not provide Intel with a key customer capable of maximizing the operation of its costly chip manufacturing facilities. Shares climbed by 0.4% on the previous Monday.
“For the foundry business to reach a state of delivering robust and sustainable earnings growth is essential,” stated Ivana Delevska, the chief investment officer at Spear Invest, whose prominent ETF holds over $110 million in assets. “That’s extremely unlikely at this stage.”
Although its foundry division constituted approximately one-third of Intel’s revenue in the past twelve months, it has predominantly been a financial drain. The division reported nearly $18 billion in revenue over four quarters, yet Intel incurred losses exceeding $13 billion from these earnings.
During a press conference regarding the investment, Nvidia’s CEO Jensen Huang described the partnership with Intel as primarily a product collaboration, stating that Nvidia will still be a customer of Taiwan Semiconductor Manufacturing Co. while it explores Intel’s technology.
Recent Wall Street forecasts for Intel’s profitability in 2025 and 2026 have shown negligible change in the previous month, based on average analyst estimates collated by Bloomberg. Analysts predict adjusted net income of $640 million on revenues of $52 billion for 2025, followed by $3.2 billion on $54 billion in sales for 2026.
Without significant improvement on the horizon, Intel’s stock valuation—already reminiscent of dot-com era levels—continues to escalate. If the share price maintains its current position near $30, it is projected to trade at about 43 times earnings by the end of the 2026 fiscal year, according to current analyst forecasts. This figure could drop to around 24 times earnings by the end of the 2027 fiscal year if the stock price remains stagnant during that period.
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