Nvidia Just Dealt a Devastating Blow To Intel. Here’s What It Means for Investors. | The Motley Fool

After years of fruitless efforts, Intel’s (INTC 0.26%) turnaround finally seems to be picking up steam.

The legacy chip giant has attracted investments from both the federal government and from Nvidia (Nasdaq: NVDA), and investors seem to have confidence in new CEO Lip-Bu Tan, the former Cadence Design Systems CEO who resigned from Intel’s board of directors in 2024 after criticizing the way the company was being run.

The stock has now jumped more than 100% over the last six months, which includes a pullback after its fourth-quarter earnings report. However, investors seem to be overlooking a potentially devastating assessment by Nvidia of Intel’s new 18A process.

Intel’s 18A process

Much of Intel’s turnaround is staked on its ambitions of becoming a leading contract chip manufacturer on par with TSMC and Samsung, the global leaders. It established Intel Foundry in 2021 and has lost billions of dollars since then, building it out new, advanced processes like 18A, which refers to 18 angstroms, or 1.8 nm, the node used to create the chip.

The company just began production on 18A, and a lot is riding on its success for Intel. Management sounded optimistic on the recent earnings call as CEO Lip-Bu Tan said, “I’m encouraged by the steady progress on our Intel 18A use,” and added, “yields continued to improve steadily as we work to ramp the supply needed to meet strong customer demand.”…