Intel shares jumped 13% in premarket trading Tuesday after the company reportedly won an order from Google for more than 3 million tensor processing units, slated for 2028 production. The news, first reported by The Information, is the clearest signal yet that Intel’s foundry push is gaining traction with hyperscalers desperate to diversify away from TSMC.
This isn’t a small pilot program. Three million TPUs is a serious volume commitment, one that validates Intel’s manufacturing roadmap in the eyes of a customer that knows AI hardware better than anyone. Google’s decision to place production years out suggests it sees Intel as a viable long-term partner, not just a backup option when TSMC can’t keep up.
The Street has been skeptical of Intel’s foundry ambitions for years. Late last quarter, the stock was trading at multi-year lows as investors questioned whether the company could ever compete with TSMC on process technology and yield. This deal is the first concrete evidence that someone big believes they can.
Nvidia is also reportedly evaluating Intel’s packaging technology for a multi-GPU processor, though no order has been placed yet. If that materializes, Intel’s foundry narrative changes completely.
From a technical perspective, the stock has been in a deep bear channel since its 2024 highs. Tuesday’s gap-up broke above the 20-day moving average, which had been acting as resistance for weeks. The RSI, sitting at 28 before the news, was approaching oversold territory — the kind of setup that precedes explosive moves when a catalyst hits. Volume on the move is heavy, with premarket turnover already exceeding the average daily volume.
The key level to watch now is $24.50, the 50-day moving average. A close above that opens the path to $28, the late-May highs. Below that, $21.50 becomes the next support.
But don’t get carried away. One order, even a big one, doesn’t fix Intel’s structural problems. The company still faces margin pressure in its core PC and server businesses, and its foundry unit won’t be profitable at scale for years. This is a long-term turnaround story that just got its first real vote of confidence. The question now is whether Intel can execute.
Key Takeaways
Strengths
- Major hyperscaler order validates foundry technology and roadmap
- Strong balance sheet with $25 billion in cash and equivalents
- Diversified business spanning PC, server, and emerging AI chip markets
Challenges
- Foundry profitability remains years away with heavy capital requirements
- Core PC and server markets face margin compression from AMD and Arm-based competitors
- Execution risk on process technology roadmap and customer deliveries
Analyst Note
The Google order is a significant inflection point for Intel's foundry business, but the company's turnaround hinges on execution over the next 18-24 months. Near-term catalysts include potential additional hyperscaler deals and Nvidia's packaging evaluation. However, core business headwinds and heavy capital spending remain risks. The stock's fair value target is $30, based on a sum-of-the-parts valuation that assigns a modest premium to the foundry unit.
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