Intel shares jump as investments, cost cuts catapult turnaround efforts

Core Viewpoint - Intel shares experienced a significant surge, reaching an 18-month high, driven by CEO Lip-Bu Tan's cost-cutting measures and improved quarterly profits, indicating a potential turnaround for the company after a challenging period [1][2]. Financial Performance - Intel's stock rebounded by over 90% in 2025, outperforming competitors Nvidia and AMD, with a forward price-to-earnings ratio of 71.51 compared to Nvidia's 30.49 and AMD's 40.14 [4]. - The company reported that demand for its chips, especially in data centers, is exceeding supply as operators upgrade CPUs for AI workloads [5]. Strategic Investments - Multi-billion-dollar investments from Nvidia, Japan's SoftBank, and a U.S. government stake have provided financial support to Intel as it seeks to revive growth [3]. - CEO Lip-Bu Tan has shifted Intel's capital strategy to rely more on external commitments and has sold a majority stake in Altera, moving away from the previous spending-heavy approach [6]. Operational Challenges - Despite the positive demand outlook, Intel's finance chief indicated that yields for its advanced 18A manufacturing process will remain below industry standards until 2027 [5]. - Analysts caution that while Intel has made progress, the turnaround is not yet complete, suggesting that the company is still in a challenging position [6].