Bernstein analyst Stacy A. Rasgon published a research report on Intel on June 18, evaluating the recent endorsement by former President Trump for Apple and Intel to collaborate on PC chip design and manufacturing in the United States. The report characterizes this development as a signal of a shifting chip manufacturing landscape but emphasizes that the initial scale is limited and it represents more of a proof-of-concept than an immediate profit opportunity. Bernstein maintains a 'Market-Perform' rating on Intel with a $100 price target, suggesting that while the direction is positive, it does not support further upside from the current stock price of approximately $121.10. The target implies some room for downside.
Minimal Near-Term Revenue, Strategic Value Lies in Endorsement
According to Bernstein's calculations, Apple shipped approximately 23.68 million notebooks over the past 12 months, with premium models (priced above $700) accounting for about 22.15 million units. If Intel were to secure 40% of those orders as an initial target, the annual PC chip foundry volume would be around 5 million units. Assuming an average selling price of $25,000 per wafer, this business would generate approximately $500 million in annual revenue, contributing roughly $0.03 to earnings per share. In contrast, Intel's annual revenue is about $55 billion and its annual EPS is about $1.50, making this contract almost negligible from a financial perspective. The report stresses that the value of this order lies not in its revenue scale but in the trust endorsement it represents from a major US customer in Intel's manufacturing capabilities.
Policy Encouragement Is a Plus, But Not a Substitute for Market Competitiveness
Trump encouraged Apple to work with Intel, but Bernstein points out that this encouragement is not mandatory. Customers will not be forced to use a supplier unless the supplier can demonstrate three conditions: the ability to produce according to specifications, a competitive cost structure, and reliable supply. Intel has moved into risk production on its 18A process, showing credible technical progress, but mature capacity and cost competitiveness still need to be observed. The report repeatedly emphasizes that 'there is still a lot of wood to chop here' — moving from small-scale proof-of-concept to mass production requires significant time and capital investment.
Geopolitical Logic and the Tension of Long-Term Potential
Apple has long pursued a supplier diversification strategy, and geopolitical factors have become a core variable in recent years. The US government, through the CHIPS and Science Act, is pushing for the reshoring of critical chip manufacturing. Apple entrusting some of its premium PC chip orders to Intel's US factories aligns with policy direction and helps reduce reliance on a single region, especially Taiwan. For Intel, re-entering Apple's supply chain itself signals that its 18A process has reached a certain level of availability, which could have spillover effects on other potential customers such as data center CPU or AI accelerator makers. However, even if Intel secures about 40% of Apple's PC chip orders, annual shipments would only be at the level of 100,000 to 150,000 units, still in the 'trial production' or 'proof-of-concept' phase, contributing only a few million dollars in revenue. In the long run, this small-scale entry has path-dependent value. If Intel can prove its process stability and delivery capability, it may subsequently win larger foundry orders for cloud computing chips, AI accelerators, and communications chips — markets that are much larger than PC chips.
Bernstein's report does not quantify this 'option-like long-term value' but acknowledges its existence, noting that the path to realization depends on further customer expansion and continuous process ramping. From an investment perspective, the bet is on the progress of Intel's 18A process and the continuity of US policy support, not on short-term financial improvement or direct margin boosts from subsidies. Key signals to watch include: revenue recognition and gross margin changes in Intel's foundry segment in the next quarterly report, yield improvement and cost reduction trends for the 18A process, whether any other major customers formally adopt Intel's foundry service, and the actual pace of CHIPS Act subsidy disbursement.
This article is a summary and interpretation by TideResearch of a third-party brokerage research report. It does not constitute investment advice. Market risks exist; decisions should be made independently.