Sales of Apple's (NASDAQ: AAPL) iPhone are booming. Revenue from the iPhone soared 23% year over year in the first quarter of fiscal 2026, marking the best-ever performance for Apple's flagship product. However, sales could have been even better. Apple uses TSMC to manufacture its custom iPhone chips, and there currently isn't enough supply to meet demand. The AI boom and the subsequent demand for AI accelerators have created an industrywide shortage. Where to invest $1,000 right now? Our analyst team jus ...

Core Insights - Intel's stock experienced an impressive 84% surge in 2025, outperforming competitors Nvidia and AMD, indicating a positive shift in investor sentiment despite ongoing challenges in the company's turnaround efforts [1]. Management Changes - Following the unexpected removal of former CEO Pat Gelsinger, industry veteran Lip-Bu Tan was appointed as CEO in March 2025, implementing cost-cutting measures, layoffs, and a thorough review of business lines [3]. - Tan emphasized a disciplined approach to Intel's foundry business, with investments in the upcoming Intel 14A process contingent on confirmed customer commitments due to rising development costs [3]. Foundry Business Developments - Intel's foundry business received potential positive news with rumors that Apple may consider using Intel's 18A process for its M-series processors in 2027, which would signify a significant endorsement of Intel's foundry capabilities [4]. Strategic Partnerships and Investments - A key factor in Intel's stock performance was the series of strategic deals orchestrated by Tan, including an $8.9 billion equity investment from the U.S. Government and a $2 billion equity investment from SoftBank, enhancing Intel's financial stability [5]. - The most notable agreement was with Nvidia, which included a $5 billion investment and a collaboration to develop data center and PC CPUs that integrate technologies from both companies, marking a significant advancement in Intel's product offerings [6]. Overall Positioning - By the end of 2025, Intel emerged in a much stronger position, bolstered by cost management and strategic partnerships, setting a positive outlook for the company's future [7].

Core Viewpoint - Intel's stock experienced a significant increase of nearly 90% in 2025, driven by new leadership and substantial investments from the U.S. government, Nvidia, and SoftBank, alongside cost-cutting measures. However, for continued growth in 2026, Intel must navigate several challenges and secure key customers for its foundry business [1]. Group 1: Foundry Business and Customer Acquisition - Intel needs to secure a major customer for its foundry business, with rumors suggesting that Apple may consider using the Intel 18A process, which would be a significant achievement if realized [3]. - The company must demonstrate progress in attracting customers for its upcoming Intel 14A process, set to launch in 2027 [3]. Group 2: Product Development and Market Competition - The Intel 18A process will be critical for the launch of the Panther Lake and Nova Lake CPU families in 2026, as Intel aims to regain market share lost to AMD due to previous manufacturing disadvantages [4]. - New manufacturing processes are expected to help Intel close the gap with TSMC, AMD's manufacturing partner, which has been a key factor in Intel's competitive landscape [4]. Group 3: Market Conditions and Challenges - The current memory chip market is facing challenges, with prices rising due to high demand amid the AI boom, which could negatively impact Intel's PC CPU business growth in 2026 [6]. - Despite the temporary headwinds in the memory chip market, Intel's foundry business represents a multi-billion-dollar opportunity as demand for custom-designed chips increases [7].

Core Insights - Intel has faced significant challenges entering this year, including a lack of a permanent CEO until March and struggles in its foundry business, which is crucial for generating external revenue [1] - The company has secured a partnership with Nvidia, which will involve joint development of custom chips for data centers and PCs, providing Intel with much-needed external customers and capital [4][6] Group 1 - Intel's foundry business was not attracting meaningful customers, leading to concerns about its viability [1] - The appointment of Lip-Bu Tan as CEO marks a pivotal change for Intel, as the company seeks to stabilize and grow its operations [1] - Nvidia's investment of $5 billion in Intel will help fund the foundry business and support the scaling of Intel's manufacturing processes [7] Group 2 - The collaboration with Nvidia will involve the development of custom x86 chips for data centers and system-on-chips that integrate Intel's CPU technology with Nvidia's GPU chiplets [4] - Intel's new initiative to design custom semiconductor chips for external customers is exemplified by this partnership with Nvidia, which is expected to be the first of many [5] - The deal signifies a critical step for Intel in securing a major external foundry customer, which is essential for its long-term strategy [6]