Why Intel Just Became the Smartest Investment in Tech – And Possibly the Only One That Matters

Intel's silent power grab just hit an inflection point. While Wall Street obsesses over AI hype trains, the semiconductor giant is locking down the plumbing of the digital economy.

The chipmaker's endgame? Controlling the silicon bedrock beneath everything from cloud servers to edge devices – whether investors notice or not.

Here's what the spreadsheets miss: Intel isn't chasing trends. It's rebuilding the playing field. Recent moves in fabrication capacity and patent filings reveal a brutal truth – competitors need Intel more than Intel needs them.

One cynical note for finance bros: Those 'disruptive' startups burning cash on AI chips? They'll still need Intel's fabs when the funding rounds dry up. The house always wins.

Image source: Getty Images.

Intel is scaling back its ambitions

A theme of the report was right-sizing the business in order to meet demand, rather than investing ahead of demand. On the call, Tan summed up this strategy, saying, "I do not subscribe to the belief that, 'If you build it, they will come.' Under my leadership, we will build what customers need, when they need it, and earn their trust, through consistent execution."

In line with that thinking and in addition to the layoffs and targeted reduction in operating expenses, Intel is also aiming to reduce its capital expenditures to $18 billion for the year. That includes abandoning projects in Germany and Poland, and consolidating assembly and test operations in Costa Rica into larger sites in Vietnam and Malaysia. It also said it would slow the pace of construction at a new foundry in Ohio to ensure spending on it matches demand.

Due to a pull-forward effect from tariff fears, the company also expects the second half of the year to be below the seasonal level. In its third-quarter guidance, it called for revenue of $12.6 billion to $13.6 billion, a slight decline at the midpoint, and it sees break-even EPS.

Intel's 18A process may be its most consequential project, and one that Intel bulls had hoped will drive profitability in the foundry unit, opening it up to third-party customers and potentially making it competitive with. Intel began the start of production wafers at its plant in Arizona in the quarter, a key milestone. Tan said 18A is the foundation of the next three generations of Intel client and server products and the company is committed to fully scaling the technology.

Can Intel turn it around?

While Tan deserves some time to execute a turnaround, for which cost-cutting is the first step, the struggles are only magnified when you compare Intel to its peers.

Virtually every semiconductor stock is thriving in the current AI boom, which has been the biggest windfall in the sector arguably since the dot-com era.

Not only is Intel unable to grow right now, it's unable to do so at a time when demand for all things AI is soaring. Peers like,, andare all seeing strong growth, and even stocks of legacy tech companies likeandhave soared lately on excitement for their AI-related products.

While Intel is facing myriad challenges and has been unable to turn a profit, it may only take one success to rewrite the narrative in the stock. For now, though, that still seems elusive, and a downturn in the industry would set back its turnaround hopes even further.

At this point, Intel needs to show evidence that a turnaround is underway before it's investable, but the frothiness in the chip sector and the broad market offers some upside if the company can take the first step toward recovery.