Intel’s Peculiar Rally: A Dividend Hunter’s View

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Shares of Intel (INTC +6.47%) experienced a rather noticeable upward twitch on Wednesday, climbing a respectable 6.1% as of, well, a specific moment in time that, let’s face it, is already history. The universe, as usual, didn’t bother to wait for anyone to take notes.

Many of the usual suspects in the technology and Artificial Intelligence sectors were rebounding from a minor gravitational wobble (a “sell-off,” they call it) on Tuesday. However, Intel’s little hop might have received an extra boost from comments made by its Chief Financial Officer, David Zinsner, during a technology conference this morning. It’s always reassuring to know someone is, in effect, talking about the numbers. (Numbers, of course, being those strange symbols we invented to avoid actually counting things.)

The conversation, as reported, contained a surprising number of positive affirmations regarding current demand, Intel’s ambitions in the foundry business, and other aspects of the semiconductor giant. Which, when you think about it, is rather unusual. One expects at least some level of guarded pessimism from a CFO. Perhaps he’d had a particularly good breakfast.

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Intel’s Turnaround: A Slow Dance with Probability

Pinpointing the exact catalyst for today’s movement is, as always, a fool’s errand (no offense intended to anyone at The Motley Fool). Perhaps the most significant glimmer of hope came from Zinsner’s disclosure that Intel is making progress with yield improvements for its 18A node, and, astonishingly, at or even ahead of its internal projections. (Internal projections, naturally, being those carefully constructed fictions designed to reassure everyone involved.)

The 18A node is, apparently, rather critical to Intel’s plans. It’s the process through which they aim to achieve parity with Taiwan Semiconductor Manufacturing (TSM +1.93%). (Parity, in this context, meaning “not falling hopelessly behind.” A surprisingly modest goal, when you consider the sheer complexity of building things at the atomic level.) Ramping up a new node, however, is notoriously difficult. Yields tend to start low, which is bad, and then, hopefully, improve. Low yields hurt gross margins and discourage external customers from entrusting their precious chip designs to Intel’s foundry. (It’s a bit like asking a notoriously clumsy friend to assemble a particularly delicate watch.)

Zinsner reiterated and expanded upon the positive notes CEO Lip-Bu Tan shared back in February. The 18A yields are now improving at a consistent rate, and the first 18A product, Panther Lake, has been well-received. Not only that, but since yields are improving and the product is causing minimal existential dread, external foundry customers are now considering using 18AP, the next variant of 18A, for their own chip-making endeavors. (Apparently, the bar for “acceptable” yield is lower when you’re dealing with the infinite vastness of the semiconductor universe.) Tan had previously thought 18A would be an internal node only. In fact, reports from mid-2025 indicated Intel had ceased marketing it to external customers. (A perfectly logical decision, given the inherent unpredictability of the future.)

But today, Zinsner announced that Tan has had a change of heart. 18A, or 18AP, may actually be a viable node to offer to external customers, potentially jump-starting Intel’s ambitions to become a foundry for outside chipmakers earlier than expected. He also stated that Intel’s foundry margins should improve throughout the year. (A statement that, while optimistic, is subject to the whims of quantum mechanics and the butterfly effect.)

In addition to the encouraging news regarding the all-important 18A node, Zinsner also spoke positively about the reinvigorated demand for server CPUs, spurred on by those curious entities known as “agentic inference applications.” (The precise nature of which remains a mystery, even to those who build the chips.)

Intel’s Rally: A Question of Momentum (and Dividends)

Intel stock has pulled back slightly from its 52-week high after nearly doubling in 2025 and posting a strong January ahead of earnings. However, the post-earnings pullback, sparked by lackluster Q1 guidance, appeared to stem from supply constraints. (A far more palatable problem than, say, a complete lack of demand. One can always make more things, eventually.)

Supply constraints are, in fact, a much better problem to have than a gaping void where customers should be. And if 18A continues to improve its output throughout the year, that could lead to Intel landing external foundry customers and making an official announcement in that regard. If a large customer brings significant volumes to Intel’s foundry for either 18A or the upcoming 14A node, that could propel the stock higher. (And, crucially, maintain a respectable dividend yield. Because, let’s be honest, that’s what we’re all really here for, isn’t it? A small, regular acknowledgement that the universe hasn’t entirely forgotten about us.)

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2026-03-04 22:42