Veteran analyst has blunt message on Intel stock

Intel stock is trading approximately 0.52% lower at $36.16 as of the time of writing. The stock is down, due to a Reuters report stating that Nvidia has decided not to manufacture its chips using Intel’s 18A node (manufacturing process) after conducting some testing.

In response to this report, an Intel spokesperson told Reuters the company’s 18A node is “progressing well,” and that it “continues to see strong interest” for its next-gen node 14A.

I have closely followed Intel’s moves this year, and wrote in late September about Intel engaging customers for its fabs: “Intel’s ability to attract customers depends on how the launch of its Panther Lake and Nova Lake CPUs goes.”

Given that both CPU lines are set to launch in 2026, at the time, I saw little chance that Nvidia would manufacture anything on Intel’s 18A node until its issues had been completely resolved. We’ll explore this in more detail later.

Veteran analyst Stephen Guilfoyle has been long on Intel (INTC) for a few months.

Following the news that Nvidia decided not to use Intel’s 18A node, he conducted his analysis, noting that since early August, Intel stock had developed a rising wedge pattern of bearish reversal.

Guilfoyle offered more detail on TheStreet Pro.

He added that being long on Nvidia, AMD, Broadcom, and Intel leaves him somewhat overexposed to the space.

According to MarketBeat, the consensus rating for Intel’s stock is hold, with 20 analysts giving that rating, 6 giving a sell rating, and 5 giving a buy rating. The average target price is $38.09.

“Importantly, we don’t expect a material improvement in the current unfavorable cost structure for Intel Foundry, given slow internal adoption of 18A node (peak capacity in 2030+) and foundry competition in the U.S.,” Bank of America analyst Vivek Arya wrote in his research note in October.

He also explained that Intel stock, trading at a 50 multiple price-to-earnings ratio estimate for calendar year 2027, is overvalued. Arya’s rating for INTC is underperform (sell equivalent), and a price target is $34, based on a 3 multiple of his enterprise value-to-sales ratio estimate for 2027, in line with the historical range of 1.7 to 4.

Nvidia sells millions of GPU chips, and it needs a reliable manufacturing process. Even if Intel was going to cover the cost of the defective chips, that would mean the manufacturing would take much longer, depending on how bad the yield rate is.

Intel hasn’t disclosed yield rates for its 18A node, and its avoidance of the exact answer hints that they are not good.

“I would say the yields are adequate to address the supply, but they are not where we need them to be in order to drive the appropriate level of margins,” Intel CFO David Zinsner said during the Q3 earnings call.

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John Pitzer, corporate vice president of corporate planning and investor relations at Intel, shared his thoughts at the 2025 RBC Capital Markets Global Technology, Internet, Media & Telecommunications Conference.

“We have [said] in the past that the industry average yield improvement on a new ramp is about 7% per month, and we are now on that curve for Panther Lake, which is giving us some confidence as we launch the product this quarter,” Pitzer said, as reported by Tom’s Hardware.

The problem with Pitzer’s statement is that it isn’t clear what 7% represents. To illustrate this, let’s say that hypothetically, yields are 10% and they increase by 7% of that 10%, which gives us 10.7%. However, it could also mean that they get a 7% increase, in the sense that they go from 10% to 17%.

He said the dramatic increase started about seven or eight months ago, so if it were the latter case, it would mean the yields increased by approximately 56% from whatever the starting point was. If Intel’s yields hit more than 56% and are increasing by 7% per month, it wouldn’t need to keep avoiding the exact answer.

In addition to the yield problems, switching to a manufacturing process from another company is not a trivial task. Intel needs to have proof that the switch is worth it. The company was already focusing more on securing major contracts for its next-generation 14A node, due to the difficulties it had in attracting them to the 18A node, as reported by Reuters and Tom’s hardware in July.

Related: Bank of America resets Micron stock price target, rating

This story was originally published by TheStreet on Dec 25, 2025, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.