Intel CEO Lip-Bu Tan Encounters a “Catch 22” in Turnaround Strategies, Says Investment Firm

This is not investment advice. The author has no position in any of the stocks mentioned.

Intel’s Leadership Transition Under COVID Challenges

When Lip-Bu Tan was appointed as the new CEO of Intel in March 2025, Wall Street analysts expressed cautious optimism about his potential to steer the tech giant towards recovery. However, as time has passed, the sentiment surrounding Intel’s turnaround strategy has turned more ambiguous, reflecting a broader uncertainty among investors and analysts alike.

Current Analyst Ratings and Price Target

Recently, analyst Gary Mobley of Loop Capital contributed to this cautious outlook, assigning a ‘Hold’ rating to Intel’s stock and setting a price target of $25. Mobley highlights that the company’s turnaround strategy is still in its infancy, complicating the overall outlook.

The Manufacturing Dilemma

The root of Intel’s challenges lies in its stark competition with industry leaders like AMD and NVIDIA. According to Mobley:

“TSMC’s advanced-node manufacturing is better, and for Intel Products to become more competitive with AMD, NVIDIA and the Arm community, TSMC is the obvious manufacturing partner for Intel Products’ future compute tiles.”

This observation underscores a critical “catch-22″for Intel: reliance on TSMC’s technology while coping with high fixed costs that demand robust volume orders from its products division. Mobley suggests that the interconnectedness of Intel’s Foundry and products divisions could pose significant challenges moving forward.

Potential for a Strategic Shift

Analysts are speculating that if Intel were to move away from the “Foundry 2.0″model—or separate it from Intel Corp—it could lead to a more favorable outlook. Mobley remarked:

“Should the Intel Corp story shift away from ‘Foundry 2.0’, or detaches Foundry from Intel Corp, we may become more constructive with our rating.”

Wells Fargo’s Concerns

Supporting this cautious stance, Wells Fargo has emphasized that it’s premature to consider a full recovery for Intel. While the bank anticipates a “net-positive”update regarding the yield progression of Intel’s 18A process during the upcoming Q2 earnings call—crucial for reaching breakeven in the foundry division by 2027—they also flagged concerns over the uncertain launch dates for the 18A-based Diamond Rapids Xeon CPUs.

Furthermore, Wells Fargo projects that the 18A-based Panther Lake CPUs may debut by late 2025, but their volume ramp-up is likely delayed until the first half of 2026. The bank also signaled that AMD is expected to gain market share at Intel’s expense through the second half of 2025 and into 2026, aggressively leveraging its 2nm-based Zen 6 EPYC platform.

Intel’s Competitive Landscape

Intel is finding itself squeezed from two sides in the client computing market, facing intense competition from both AMD and ARM-based products.

Positive Developments Amidst Challenges

On a brighter note, KeyBanc reported last week that Intel has made incremental progress in its 18A process, with yields reaching 55 percent—an improvement of 5 percent from the previous quarter. Notably, these yields have surpassed those of Samsung’s SF2 and are approaching parity with TSMC’s yields for their bespoke 2nm processes.

As of this morning, Intel shares have seen a minor increase of 0.5 percent in pre-market trading. The company is poised to announce its second-quarter earnings later this week, which will likely provide critical insights into its ongoing efforts to stabilize and grow its market position.

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