Chip stock Intel (INTC) was on top of the world recently as word emerged that Apple (AAPL) was looking to team up with Intel to produce chips. New reports suggest that deal may not be all that welcome after all. Apple supply-chain analyst Ming-Chi Kuo took a look at the deal and discovered it seems to focus heavily on legacy chips for the iPad, iPhone and Mac. This news hit investors hard, and Intel shares dropped nearly 5.5% in Friday afternoon’s trading.
Claim 55% Off TipRanks
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Discover top-performing stock ideas and upgrade to a portfolio of market leaders with Smart Investor Picks
The reports note that Apple has launched low-end, legacy processors for iPhone, iPad and Mac using Intel’s 18A-P process, backed up with Foveros packaging. The allocation overall is about 80% iPhone, which is almost exactly what Apple’s typical device sales mix looks like.
In fact, Kuo noted, Apple has a distinct plan for Intel’s production operations. There will be small-scale tests in 2026, a sharp rise in production in 2027, further growth in 2028, followed by a planned decline in 2029. While this might sound disappointing—and on some levels, it is—there is one point that is welcome news. Apple is looking to get Intel ready for prime time as a key supplier over the long term. That distinction will be particularly valuable to Intel, so focusing on the low-end chips right now to ramp up to future developments is a solid arc to have.
More About the Razor Lake-AX
We heard about the Razor Lake-AX chips at Intel not so long ago, and now, new word has emerged talking about their overall capability. New reports say that the Razor Lake-AX could have as many as 32 Xe3 cores, which would give the Razor Lake-AX one serious Arc GPU built into it.
If the Razor Lake-AX does look like this, then it should be ready to compete with some of the biggest names in the field so far, including the Strix Halo and the Gorgon Halo from AMD (AMD). Throw in on-package memory, and the complete picture should be pretty positive. There will also be a slightly lower-end version that only has 16 Xe3 cores, which is not especially bad, and could serve as a more bargain-priced alternative.
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on 11 Buys, 24 Holds and three Sells assigned in the past three months, as indicated by the graphic below. After a 435.23% rally in its share price over the past year, the average INTC price target of $82.70 per share implies 24.67% downside risk.
