INTC Stock Jumps Overnight: Report Says Apple In Discussion With Intel Foundry For Manufacturing Custom Chips

• Apple held preliminary talks with Intel and Samsung to produce the main chips that power Apple devices, Bloomberg reported.
• The iPhone-maker is considering adding additional vendors to offset risks associated with reliance on TSMC alone.
• Stocktwits sentiment for INTC remained ‘bullish.’

Intel Corp. shares rose nearly 3% in overnight trading ahead of Tuesday after a report said Apple is in talks to use its chip manufacturing services for core processors used in Apple devices.

Apple has held preliminary talks with the government-backed chipmaker, according to a Bloomberg report, which cited unnamed sources. The iPhone-maker has also engaged with South Korea’s Samsung, with executives visiting its under-construction Texas plant that will produce advanced chips.

Taiwan Semiconductor Manufacturing Co. (TSMC) makes Apple’s main processors, known as system-on-a-chip (SoC) chips. Apple has, of late, considered adding additional suppliers to offset potential disruptions to its business from supply chain snags.

Recent shortages have been driven by the massive build-out of AI data centers and by higher-than-anticipated demand for Macs capable of running AI models locally. 

On last week’s earnings call, Apple admitted that chip shortages were limiting iPhone and Mac growth. “We have less flexibility in the supply chain than we normally would,” CEO Tim Cook said.

INTC Pushes To Revive Foundry Business

If a deal materializes, it would be a huge filip for Intel’s foundry. Over the past year, Intel has undergone massive reorganization and downsizing under its new CEO, Lip-Bu Tan. The changes were complemented by the U.S. government picking up a 10% stake in the company in August, surging demand for AI data center chips, and a recent partnership with Nvidia.

Central to the turnaround is Intel’s foundry push, as it looks to aggressively win external customers. 

Tesla has tapped Intel to manufacture chips for Elon Musk’s Terafab complex. The company also gained momentum earlier this year with the launch of its Core Ultra Series 3 processors built on the 18A process – roughly a 2-nanometer-class node that Intel calls the most advanced semiconductor manufacturing technology developed and produced in the U.S.

Intel designed and supplied processors for Apple’s Mac computers from 2006 until about 2020, when Apple moved to in-house chips.

INTC Stock Surge

Intel stock has been closely watched by investors, surging 160% year to date, with gains supported by strong quarterly results reported last month.

Revenue rose 7% to $13.6 billion last quarter, beating Wall Street estimates by about 9%. The Data Center and AI segment posted particularly strong sales, which rose 22% to $5.05 billion. 

Intel Foundry’s operating loss narrowed to $2.4 billion, improving by $72 million quarter over quarter, supported by better yields across Intel 4, 3, and 18A processes.

Retail’s View On INTC

On Stocktwits, the retail sentiment for INTC remained ‘bullish,’ unchanged from the previous day. Some traders dismissed the news as speculative with little immediate bearing for the stock.

“I won’t be surprised if it’s red by morning. The news was old and highly speculative with no immediate orders or revenue growth. Its pump will not be sustainable at this high RSI,” said a trader.

The Relative Strenght Index, or RSI reading for INTC was 79.85, per Koyfin. Readings above 70 indicate overbought conditions.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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