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Intel (INTC) stock is being rewarded on Monday following reports that two of the largest AI companies, Nvidia (NVDA) and Broadcom (AVGO), could soon become customers of its foundry business.
The AI darlings are running tests on INTC’s most advanced manufacturing process (18A), according to sources that talked to Reuters on condition of anonymity today, March 3.
While Intel, Nvidia, or Broadcom have not officially commented on the report, shares of the struggling chipmaker are up more than 3% at the time of writing.
Why Is the Nvidia News Significant for Intel Stock?
Winning NVDA or AVGO as customers could be a significant boost for Intel’s chip manufacturing business that’s been mired in losses for years. Successful tests could lead to significant contracts, potentially worth hundreds of millions – or billions – of dollars.
On the flip side, the semiconductor firm faces intellectual property headwinds, which could prevent customers from using its 18A process to make chips until the back half of 2026.
That said, an announcement alone that INTC has secured Nvidia or Broadcom as customers could breathe new life into the company’s share price as markets tend to be forward looking.
NVDA or AVGO Could Meaningfully Boost Intel’s Revenue
A vote of confidence from AI darlings would also substantiate Intel’s claims that its latest 18A process could challenge Taiwan Semi’s (TSM) dominance in chip manufacturing.
More importantly, if the company’s foundry does indeed win giants like Nvidia and Broadcom as customers, others may follow suit, leading to an even bigger boost to its revenue.
Fixing the 18A problems could help Intel “start to win external foundry business [and] have success yielding advanced node product designs in server and data center products,” Jordan Klein, a Mizuho analyst told clients in a research note on Monday.
Wall Street Continues to Recommend Caution on INTC Shares
While the Nvidia and Broadcom news is meaningfully positive for Intel stock, there’s still a lot of “ifs and buts” in its foundry’s overall path to profitability.
Running tests does not guarantee that either of the two companies will sign a significant manufacturing contract with INTC, which is why Wall Street continues to rate the chip stock at “Hold” only.
Analysts’ mean target of $24.24 on Intel is roughly in line with its current trading price at the time of writing.
