Intel's results prove: It doesn't pay to bet against Trump
Intel's stock has become one of the fastest-growing tech stocks of the past year, jumping by about 326% and crossing a market cap of half a billion dollars, its highest ever. This mirrors Alphabet's reports from yesterday, which showed that software and cloud giants are only increasing their commitment to purchasing chips.
At the beginning of the month, US President Donald Trump boasted that the US government had made "$70 billion" on paper when it acquired about 10% of Intel's stock during its most difficult period in the summer of 2025.
Intel's stock (100.23, -2.33%) has become one of the fastest-growing technology stocks of the last year after jumping by about 326% and crossing a market cap threshold of half a billion dollars, the highest in its history ever, even relative to its glory days in the nineties when it was still considered the largest chip company in the world.
Yesterday (Thursday) it turned out that if the US President wants to - he can be Intel's best salesman. It is not impossible that the President, who himself revealed that he was the matchmaker for a chip deal between Intel and Apple (321.66, -1.30%), is also responsible for other technology giants that have made and are making huge deals with the company from Santa Clara: the company reported sales of custom chips (XPU) - meaning chips produced according to the structure requested by other technology companies - at an annual rate (ARR) of $2 billion, three times higher relative to the parallel quarter, and that the Foundry division - Intel's production plant reserved for external customers - exceeded expectations.
It is not impossible that the giant agreement announced earlier this year for the production of chips for Tesla (319.69, -14.52%) and SpaceX (118.24, +2.59%) at Intel's plants, the many rumors about the interest that Nvidia (208.76, -1.56%) is showing in production at Intel's plants, and the expansion of cooperation with Google (318.34, -6.89%) - were also born with the intervention of the administration, although one cannot be sure of this.
The business of developing and producing custom chips for cloud companies may become a $4 billion business by the end of the year, out of a market that, according to Intel CEO Lip-Bu Tan, stands at about $100 billion - and in which companies like Broadcom and Marvell operate - except that Intel also offers, in addition to them, production and packaging services at plants in the USA that produce with technology smaller than 2 nanometers.
Beyond custom chips, the entire production activity of Intel for external clients - which embodies Intel's greatest rehabilitation effort to get out of the crisis - reached $5.8 billion, higher relative to expectations that stood at $5.48 billion and 6% more than the parallel quarter due to improvements in the yield of the new production process, chips with 1.8 nanometer technology (produced under the 18A brand). According to the company, the yield of silicon wafers in the field has improved by tens of percent during the year.
However, the division's activity is still loss-making - with a decrease in losses to $730 million due to an increase in the yield of silicon wafers and a decrease in the workforce. Intel is still required to invest billions of dollars in establishing production plants in the USA and in upgrading the plant in Ireland - currently the company's only flagship plant outside the USA that produces chips with advanced technologies. The plant in Kiryat Gat, which focuses on the production of "Intel 7" chips and is not related to the "Foundry" business, is waiting for an upgrade that is apparently delayed due to the instability in the Middle East.
Annual growth of 59% in standard processors
The sudden growth at Intel in the last two quarters is good news that brings color back to the cheeks of the company's investors - but they are not necessarily related to Trump or even to the new CEO Tan.
The transition in the AI industry from an emphasis on training language models to running existing models and searching for computing power at a low cost is leading all cloud giants to purchase Intel's standard chips - "XEON" processors - core processors intended for operation in server farms.
In the previous quarter, Intel amazed investors with a first sharp jump in this activity, and now it reports an annual growth of 59% to $6.3 billion in the second quarter with an operating profitability of 40%, and a total operating profit that grew by a billion dollars from quarter to quarter.
In such a case, these are standard processors produced in Kiryat Gat, Ireland, and the USA - but they are responsible for about 70% of the company's revenues and for an overall jump of 70% relative to last year in activities related to artificial intelligence.
Now, boasts CFO David Zinsner - it is no longer possible to say that Intel is not on the artificial intelligence wave - as most of its revenues from the field - this is the first revolution that Intel is joining in a broad way since the personal computing revolution in the nineties and early two-thousands.
Intel's stock is now jumping by about 5% in after-hours trading on Nasdaq after it had fallen by about 2% during the trading day and by about 24% in the last month, due to the air coming out of chip stocks. This is a mirror image of the Alphabet reports from yesterday - in which the search giant revealed that it had increased its spending on chips and servers to over $200 billion for the whole year, which led to disappointment from investors and proved that the software and cloud giants are only increasing their commitment to purchasing chips.
