Intel Corp (NASDAQ: INTC) tanked nearly 10% on Friday even though the chipmaker, under its new chief executive Lip-Bu Tan, reported better-than-expected revenue for its fiscal Q2 and issued a decent top-line guidance.
Investors are bailing on the semiconductor stock this morning primarily because it disappointed on the earnings front– not only in the second quarter but in terms of the future outlook as well.
However, the numbers do not suggest Lip-Bu Tan is failing at turning around INTC.
If anything, they reinforce that his strategy is actually producing results and all it needs perhaps is more time to unfold as a more palpable success story.
After all, Lip-Bu Tan is not just tweaking the playbook for Intel stock – he’s rewriting it!
Tan’s strategy for Intel stock is different from Gelsinger
Since stepping into the role in March 2025, Lip-Bu Tan has initiated a sweeping transformation that diverges sharply from the expansive, capital-heavy strategy of his predecessor, Pat Gelsinger.
While Gelsinger’s tenure was marked by bold investments in global foundry expansion and a push to compete head-on with Taiwan Semiconductor Manufacturing (TSMC), Tan is taking a more disciplined, demand-driven approach.
Here’s how his strategy is different:
No more blank checks: Tan has halted previously announced projects in Germany and Poland and slowed construction in Ohio, stating, “every investment must make economic sense”.
Lean and focused: Intel is cutting 15% of its workforce, streamlining management layers by 50%, and aiming to end 2025 with 75,000 employees.
Foundry realignment: Intel Foundry Services (IFS) is being reshaped to serve internal needs first, with external customer expansion contingent on confirmed demand.
Engineering first culture: Tan has emphasized empowering engineers, flattening bureaucracy, and personally reviewing major chip designs before tape-out.
This pivot is designed to restore investor confidence and improve Intel profitability.
While painful, the restructuring signals a shift toward operational discipline and create long-term value for those invested in INTC shares.
What could be the greenlight to own INTC shares?
According to Bernstein analyst Stacy Rasgon, the real proof point for Intel’s turnaround lies in its next-generation process technologies– particularly the 18A node.
This advanced manufacturing process, which combines RibbonFET gate-all-around transistors and PowerVia backside power delivery, is the company’s best chance at reclaiming process leadership from TSMC.
Key developments so far:
18A in risk production: Intel confirmed that 18A has entered risk production, with Panther Lake chips expected to ramp later this year.
Performance gains: Intel claims 18A offers up to 25% faster performance and 40% lower power draw compared to Intel 3.
Customer validation: The US government is already onboard, and Intel is courting major clients like Microsoft and Amazon.
Foundry viability: Investors will be watching whether Intel can attract external customers to 18A and eventually 14A, which is being developed in close partnership with large clients.
If Intel can demonstrate volume production, yield stability, and customer traction for 18A, it could mark a turning point.
Rasgon notes that logos for 18A and 14A already appear in Intel’s investor materials, suggesting continued commitment– which, if it bears fruit, could unlock the next leg up for Intel stock.
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