Intel Shares Face Pressure as Nvidia Halts Foundry Testing

Intel's stock experienced a modest pullback in pre-market trading on Friday, shedding approximately 3%, following reports that Nvidia has paused further testing activities for Intel's advanced 18A manufacturing process. This development casts a fresh spotlight on the resilience of Intel's ambitious foundry strategy, coming after a period of significant share price strength.

Market reports indicate that while Nvidia has completed evaluations and pilot runs using Intel's 18A node, it has decided against moving to mass production with the technology. The achieved results are understood to have fallen short of the specific yield and performance requirements for Nvidia's high-volume artificial intelligence processors.

This represents a notable setback for Intel Foundry Services (IFS). Securing a major manufacturing contract from a leader like Nvidia would have served as a powerful endorsement of the competitiveness of Intel's process technology. Intel, however, maintains that the 18A development remains on schedule technically. The company plans to utilize the process for its own upcoming processor generations, codenamed "Panther Lake" and "Nova Lake." Furthermore, the first high-volume factory for 18A, Fab 52 in Arizona, is reportedly on track to commence operations as planned.

The market's initial reaction was measured. In early trading, Intel shares hovered around $36.07, only slightly below the previous day's close of $36.16. Nvidia's stock was largely unchanged, down about 0.3%. It is important to note that Nvidia's $5 billion investment in Intel, finalized in September 2025, was structured from the outset around product collaboration and did not include any binding commitment to utilize Intel's foundry capacity.

Foundry Strategy Under Scrutiny

Nvidia's decision redirects attention to Intel's broader plan to open its fabrication plants to external customers. The 18A node had been positioned as a technological leap intended to eventually surpass industry leader TSMC.

Industry observers now suggest that larger-volume foundry business may increasingly target Intel's subsequent 14A node, announced for 2027. Concrete customer commitments for this future technology will play a crucial role in validating the strategy.

Should investors sell immediately? Or is it worth buying Intel?

Despite this recent pressure, the overarching narrative for Intel remains robust. Since the start of 2025, Intel's share price has surged roughly 80.3%, significantly outperforming the broader market. This rally has been fueled by optimism surrounding the corporate transformation led by CEO Lip-Bu Tan and substantial government support.

In August 2025, the U.S. government converted funds from the CHIPS Act into an $8.9 billion equity stake in Intel, giving it an approximate 9.9% ownership. The move aims to secure domestic semiconductor supply chains.

Operationally, early signs of stabilization are emerging. For the third quarter of 2025, Intel reported revenue of $13.65 billion, exceeding analyst estimates of $13.10 billion. Earnings per share came in at $0.23. Cost-saving initiatives and portfolio adjustments are beginning to show measurable results in the financial statements.

Market Expectations and Technical Levels

The next critical milestone will be the fourth-quarter earnings report, expected on January 29, 2026. Investors will focus intently on the "Foundry Revenue" segment and management commentary regarding the pipeline of external customers for 2026.

Despite the strong year-to-date performance, analyst sentiment remains cautious. The consensus rating predominantly clusters around "Hold" to "Reduce." The average price target stands at approximately $34.84, slightly below the current trading level near $36.07, which suggests limited upside potential from the perspective of market researchers.

From a technical analysis standpoint, the zone around $34.50 is viewed as a key support level. A sustained break below this level could signal a deeper consolidation of the substantial yearly gains and potentially intensify debate over the medium-term success of the foundry initiative.