Intel shares are up 240% in 2026. No other semiconductor stock has matched that kind of run this year.
The most direct catalyst was a Wall Street Journal report last Friday: Apple and Intel have been negotiating for more than a year and have now signed a preliminary agreement for Intel to manufacture chips for Apple.
M-series chips for Mac and iPad could begin production in Intel fabs as early as 2027. The iPhone may have to wait another year, until 2028.
Apple is loosening TSMC's exclusive grip
For more than two decades, Apple has effectively given its custom-chip foundry work to one company: TSMC. From the earliest A-series processors to the M5 and M5 Pro, Apple Silicon has rolled off TSMC lines.
That door is now opening.
WSJ described the talks as intensive negotiations lasting more than a year, with a formal agreement settled in recent months.
Three questions now matter:
- Which products move first: Apple analyst Ming-Chi Kuo said last year that the shift would likely start with entry-level, non-Pro Mac hardware.
- How much volume Intel gets: Apple has not disclosed the allocation, but with more than 200 million iPhones plus tens of millions of iPads and Macs shipped each year, even a 10% slice would be a contract worth tens of billions of dollars.
- How TSMC responds: there has been no formal response so far, but Apple has effectively placed a backup card on the table.
Trump personally acted as a broker
This is not only a business story. According to WSJ, President Trump personally pressed Tim Cook at the White House to use Intel.
The weight of that push is easy to understand.
The US government now owns roughly 10% of Intel after last year's direct Treasury investment. Every major Intel order lifts the paper value of that public stake. In that sense, Trump's push is also valuation management for the government's own portfolio.
The deeper logic is domestic foundry capacity. TSMC's Arizona plant is running, but its capacity is nowhere near enough to absorb Apple's full demand. Intel is the only player inside the United States that can plausibly expand to Apple's scale.
If the deal holds, the largest piece of America's "bring semiconductors home" plan has effectively fallen into place.
The Intel side of the story
Intel Foundry Services began pouring money into this strategy in 2021 under Pat Gelsinger. After five years of spending, the big orders still were not arriving. Intel was losing ground to AMD in CPUs, while Apple, Nvidia and AMD were not choosing it as a foundry.
The turn began last year. After the Trump administration took an equity stake, reports emerged of talks with the Department of Defense, SpaceX and Apple.
By the time WSJ's May 8 report appeared, Intel's share price had already stabilized above $120. Add the Apple confirmation trade, and the stock is up 240% this year. Nvidia is up 6.3% over the same period. A year ago, that comparison would have been almost unimaginable.
The industrial details matter more than the stock chart
Why would Apple move now? There are three reasons.
First, TSMC capacity is hitting a ceiling. TSMC's 2nm and A14 capacity is already booked into mid-2027. Even if Apple wants to add orders, there is little room in the queue.
Second, AI chip demand is crowding out foundry supply. Nvidia, AMD and Broadcom are all fighting for TSMC capacity. Apple's annual iPhone demand is stable, but stable does not automatically mean priority.
Third, geopolitics. The supply-chain risk around Taiwan needs little explanation. For the past three years, Apple has been rehearsing a shift toward the United States and India. This deal would turn that rehearsal into a structural change.
The cost is clear. Intel's process yields have historically lagged TSMC's. If Apple hands part of the M-series lifeline to Intel, at least the first two product generations will carry the risk that yield does not perform as expected.
Cook appears willing to carry that risk. That is the most important part of this news.
What it means for AI
The direct link is Apple Silicon. The next generations, likely M6 and M7, are expected to carry stronger on-device AI capabilities. If Intel's foundry yields stabilize, Apple's Apple Intelligence lineup gains a more controllable hardware base.
The indirect link is larger: a second US-based AI chip supply chain, outside Nvidia and AMD, is being switched on. Intel is not only talking to Apple. It is also in discussions with Reflection AI, SpaceX and the Pentagon. If the Apple-Intel agreement works, the next customers knocking on Intel's door could be second-wave AI companies building their own chips, including OpenAI or Anthropic.
How long Nvidia can remain relaxed depends on how firmly Intel can hold this second-source position.
Sources: Apple and Intel have reached a deal to produce future chips (9to5Mac); Intel shares soar on Apple chip deal report. Here's why it signals a total pivot for chipmaking (CNBC); CocoLoop, Apple reportedly strikes deal for Intel to make some of its chips (Tom's Hardware)