In a year dominated by headlines about Nvidia's artificial intelligence dominance, the most surprising stock story of 2025 may be the comeback of its beleaguered rival. Intel shares have surged more than 80% year-to-date, outperforming not just AMD, but every single member of the vaunted "Magnificent Seven" mega-cap tech stocks.

The remarkable turnaround comes after what CEO Lip-Bu Tan described as a "defining year" for the company—one that saw Intel secure billions in strategic investments, a rare government backing, and renewed confidence from customers who had been quietly writing it off.

Nvidia's Billion-Dollar Vote of Confidence

The most consequential development of Intel's 2025 came with an unlikely twist: a $5 billion investment from its greatest rival. Nvidia, the world's most valuable semiconductor company, paid $23.28 per share to acquire over 214 million Intel shares in a private placement, giving it an approximately 4% stake in its longtime competitor.

The deal, which Nvidia CEO Jensen Huang revealed was negotiated beginning in September, cleared U.S. antitrust regulators in mid-December. While Nvidia executives have been coy about their strategic rationale, the investment sent a powerful signal to markets: if the company that has been eating Intel's lunch for years sees value, perhaps others should pay attention.

"This is a company I've known for 30 years. The talent is still there, the engineering capability is still there. Sometimes a company just needs the right leadership and the right focus to unlock what's been there all along."

— Jensen Huang, CEO, Nvidia

A Flood of Capital

Nvidia wasn't alone in betting on Intel's revival. Japanese conglomerate SoftBank followed with a $2 billion investment, while the U.S. government made a rare $9 billion direct investment as part of its CHIPS Act initiative to bolster domestic semiconductor manufacturing.

Together, the capital infusions gave Intel significant financial breathing room as it executes one of the most ambitious—and expensive—turnaround plans in corporate history. The company is simultaneously trying to catch up in AI chips, regain manufacturing leadership, and build a foundry business capable of competing with TSMC for external customers.

The Tan Factor

Much of the credit for Intel's transformation has gone to CEO Lip-Bu Tan, who took the helm in mid-2025 and immediately set about reshaping the company's culture and execution discipline.

"We're getting back to basics," Tan said in a year-end message to employees and investors. "That means fewer PowerPoint presentations and more working silicon. It means promising less and delivering more. It means earning back the trust of customers we've disappointed."

The approach appears to be resonating. Industry sources say Intel has made meaningful progress on its 18A manufacturing process node, which is crucial to the company's foundry ambitions. Early test chips are reportedly showing improved yields and performance characteristics.

Wall Street Remains Cautious

Despite the stock's remarkable run, analysts haven't fully embraced the bull case. The consensus rating remains Hold, with price targets suggesting roughly 5% upside from current levels.

The skepticism centers on several concerns. Intel's AI chip offerings still lag far behind Nvidia and AMD in market adoption. The foundry business, while strategically important, continues to burn cash without a major external customer to validate the investment. And last quarter's adjusted earnings of just $0.23 per share underscore how far Intel has to go before its financial performance matches its stock price.

Perhaps most critically, Intel has a 12-to-18-month window to secure a significant external customer for its 14A manufacturing process. Without that validation, questions about the foundry strategy will intensify.

What 2026 Holds

The coming year will be a crucial test of whether Intel's 2025 gains reflect genuine transformation or speculative enthusiasm. Key milestones to watch include:

  • Foundry customer wins: Landing a major external customer would prove Intel can compete with TSMC
  • AI chip adoption: Intel's Gaudi accelerators need to gain meaningful market share
  • 18A production: Ramping the new manufacturing process on schedule is essential
  • Profitability: The company needs to show that spending is translating to returns

For investors who bought Intel at its 2024 lows around $18 per share, the 80% gain represents a remarkable vindication. But with the stock now trading near $33, the easy money has likely been made. From here, Intel will need to execute—not just on strategic announcements, but on actual products and customers—to justify continued confidence.

As one veteran semiconductor analyst put it: "Intel has successfully changed the narrative in 2025. In 2026, it needs to change the numbers."