Intel Stock Faces Analyst Skepticism Over Foundry “Catch-22” in Turnaround Bid

The glow from Lip-Bu Tan’s appointment as Intel’s CEO in March 2025 has dimmed under Wall Street’s harsh spotlight. As the chip giant prepares to report Q2 earnings this week, analysts are delivering sobering verdicts on its comeback prospects. Loop Capital’s Gary Mobley crystallized the mood, slapping a “Hold” rating on Intel stock with a $25 target and pinpointing a paralyzing dilemma at the company’s core.

Why Analysts Are Hesitant on Intel Stock

Mobley’s analysis reveals a structural “catch-22” throttling Intel’s revival. While rivals like AMD and NVIDIA leverage TSMC’s superior manufacturing for cutting-edge chips, Intel’s own foundry division relies on internal orders to cover fixed costs. Outsourcing production to TSMC—a logical move to boost product competitiveness—would starve Intel Foundry of critical volume. “TSMC’s advanced-node manufacturing is better,” Mobley stated, “but for Intel Products to become competitive, TSMC is the obvious partner.” This conflict, he warns, makes Intel Foundry a potential “headwind” for the broader business. Until Intel decouples its product and foundry divisions or abandons “Foundry 2.0” ambitions, Loop Capital sees limited upside for Intel stock.

Wells Fargo amplified these concerns, noting it’s “still too early to underwrite a full turnaround.” The bank highlighted uncertainty around Intel’s 18A-based Diamond Rapids Xeon CPUs and expects AMD to keep gaining server market share “through 2H25 and into CY26” with its 2nm Zen 6 EPYC chips. Client computing faces a similar squeeze from AMD and ARM-based rivals. Intel’s path forward hinges on 18A process maturity—the linchpin of its foundry break-even goal by 2027.

The 18A Yield Progress: A Silver Lining?

Amid the skepticism, Intel has a critical bright spot: its 18A manufacturing yields. KeyBanc reported last week that yields hit 55%—a 5% quarterly jump—surpassing Samsung’s SF2 and nearing parity with TSMC’s 2nm process. This technical milestone is vital for Panther Lake CPUs (slated for late 2025) and the foundry division’s credibility. Wells Fargo anticipates a “net-positive” update on 18A during Intel’s earnings call but cautions that volume production remains a “1H26 story.”

Investors now face a high-stakes waiting game. This week’s earnings must clarify 18A’s trajectory and Diamond Rapids’ timeline. As Mobley emphasized, Intel’s fate depends on resolving its fundamental conflict: Can it build competitive products without undermining its foundry dreams?

Must Know

What is Intel’s “catch-22” according to analysts?
Intel needs TSMC’s advanced manufacturing to make its chips competitive against AMD and NVIDIA. However, outsourcing production would reduce volume for Intel’s own foundry division, which relies on internal orders to cover costs. This creates a no-win scenario that stifles progress.

Why is the 18A process so important for Intel stock?
The 18A node is critical to Intel’s foundry division reaching break-even by 2027. Higher yields (now at 55%) signal manufacturing competitiveness against TSMC and Samsung. Success here could revive confidence in Intel’s turnaround and stabilize its stock price.

Is AMD still gaining market share against Intel?
Yes. Wells Fargo expects AMD to keep taking server market share “through 2H25 and into 2026” with its 2nm-based Zen 6 EPYC platform. Intel also faces pressure in client computing from AMD and ARM-based chips.

When will Intel’s Panther Lake CPUs launch?
Wells Fargo projects late 2025, but notes volume production will likely slip to early 2026. These chips, built on the 18A process, are pivotal for Intel’s competitiveness in PCs and laptops.

Should investors buy Intel stock before earnings?
Analysts urge caution. With unresolved structural challenges and unclear timelines for key products like Diamond Rapids, most recommend a “Hold” stance until Intel demonstrates consistent execution via earnings and roadmap updates.

Intel’s journey back to dominance remains fraught with hard choices. While progress on 18A yields offers hope, the unresolved tension between its product ambitions and foundry realities keeps analysts skeptical. Until Intel clarifies a viable path through this catch-22—or decouples these struggling divisions—investors should brace for volatility. Watch this week’s earnings for concrete evidence of execution, not just promises.