Intel Corporation (NASDAQ: INTC) shares rallied sharply on Monday following a report from The Information indicating that both Google and Nvidia are turning to the chipmaker as a critical manufacturing backup to Taiwan Semiconductor Manufacturing Co. (TSMC). The news has pushed Intel stock toward its 20-day moving average, with a decisive break above $115 expected to accelerate near-term bullish momentum.
According to the report, Google has already placed a firm order with Intel Foundry to manufacture more than 3 million of its tensor processing units (TPUs) by 2028. Google spent months testing Intel's advanced packaging capabilities, and this order represents a significant vote of confidence that Intel can handle hyperscale AI silicon production. Meanwhile, Nvidia has not yet signed a contract but is actively running early trials on Intel's most advanced 18A manufacturing process, evaluating whether Intel can fabricate a complex processor that fuses four graphics chips into a single unit—a design crucial for Nvidia's upcoming Feynman GPU architecture.
These potential partnerships are seen as a game-changer for Intel's foundry business. For years, the Street doubted whether Intel Foundry could truly compete with TSMC or win top-tier tech clients. Landing Google as a customer and getting Nvidia to test its flagship 18A node serves as major validation of Intel's turnaround strategy. Combined with the Apple foundry deal announced last month, Intel is positioning itself as the premier US-based alternative to TSMC.
Investors are also cheering a separate partnership with Hitachi, announced on June 8, focused on accelerating 'physical AI' capabilities. The collaboration integrates Intel's advanced silicon solutions into robotics, industrial automation, and real-world edge computing systems, expanding Intel's footprint beyond traditional data centers and PC markets into high-growth industrial AI verticals.
From a technical perspective, Intel's relative strength index (14-day) currently sits in the mid-50s, indicating significant further room to the upside before the stock hits 'overbought' territory. Intel shares have already surged roughly 175% year-to-date in 2026, making it one of the most lucrative investments in the semiconductor space.
However, Wall Street appears cautious. The consensus rating on Intel remains at 'hold,' with a mean price target of approximately $98, implying potential downside of more than 10% from current levels. Analysts have expressed concerns that the rally may have gone too far, especially given the competitive landscape and the capital-intensive nature of foundry operations.
For context, the broader chip sector has seen significant volatility. Nvidia CEO Calls $1.3T Chip Rout a Discount; Analysts Weigh AI Demand vs. Rate Risks highlights the ongoing debate about valuation in the AI chip space. Meanwhile, Intel Stock Climbs to Multi-Decade Highs on AI Server Demand, Valuation Concerns Mount underscores the tension between strong demand and elevated valuations.
As Intel continues to execute on its foundry strategy, the next few quarters will be critical in determining whether the company can sustain its momentum and convert these early wins into long-term revenue growth. Investors will be watching closely for further updates on Nvidia's trial results and the ramp-up of Google's TPU production.
This article is for informational purposes only and does not constitute financial advice.
