Intel (INTC) shares approached $100 on October 12 as semiconductor stocks came under renewed selling pressure and investors questioned the cost of expanding artificial intelligence infrastructure. The decline followed a rally in September, putting the company’s recovery under scrutiny as financing concerns spread across the market. The pullback has drawn attention because Intel’s turnaround plan relies on sustained investor support while its foundry buildout continues to run at a loss.

INTC traded near $101 on Monday, down more than 3% during the session. The stock had already fallen 5.3% on October 8, extending its retreat from September’s highs, and closed October 9 at $104.70.

Intel CEO Lip-Bu Tan and Broadcom CEO Hock Tan warned Monday that financing constraints could limit AI expansion. Rising borrowing costs have renewed questions about the returns available from large data-center investments, even as demand for chips remains strong. Their remarks shifted the focus of debate from chip demand, which is still strong, to the cost of financing the infrastructure behind it.

Microsoft Advances Custom AI Chips

Microsoft plans to deploy Maia 300 processors across its cloud operations in 2027. The company’s custom AI-chip strategy is intended to lower operating costs and reduce reliance on external suppliers. The processors will support Microsoft’s Azure cloud and AI services. The project reflects a broader shift among large cloud operators toward designing more of their own silicon, a development that chip suppliers and foundry operators watch for its potential effect on future orders.

Microsoft has said Maia 300 could deliver 40% more tokens per megawatt than leading GPU systems. The shift could affect demand among chip suppliers, although Microsoft has not announced an Intel manufacturing contract for Maia 300.

Reuters reported that OpenAI’s annualized revenue in September approached $50 billion, below an earlier figure of nearly $70 billion. Different treatment of sales involving cloud partners largely explained the difference. Annualized revenue represents a projected yearly rate, rather than actual sales for a completed full year. The gap between the two figures also shows how measurement choices can shape perceptions of AI-sector performance, complicating comparisons across companies.

Intel Foundry Revenue Rises Despite Losses

The broader semiconductor selloff also affected Nvidia, whose shares retreated from record highs amid renewed concerns about AI spending and competition from custom chips. The retreat across multiple chipmakers indicated that the pressure was not confined to Intel but extended across companies exposed to AI spending.

Intel’s second-quarter results showed that foundry revenue increased 31% to $5.8 billion. External customers accounted for only $293 million, however, while the foundry division recorded an operating loss of approximately $2.1 billion. Most of the foundry’s sales came from Intel itself. The gap between total revenue and external sales highlights the central challenge of the strategy: turning heavy investment into orders from other chip designers.

Terafab and Earnings in Focus

According to Intel CEO Tan, the company remains involved in Elon Musk’s Terafab project. The project plans to use Intel’s 14A technology, although Intel’s commercial role and potential future revenue remain uncertain.

A recent report on AI stocks’ contribution to market returns found that 42 companies generated 67% of the S&P 500’s gains since January 2024. The figures offer broader context for the selling affecting chip stocks: with index gains concentrated in a small group of AI-linked names, their performance carries outsized weight in overall market results.

Tigress Financial maintains a $145 target for Intel, while Northland has set a $120 target. Tan purchased 105,263 shares at $95 in August. Intel is scheduled to report third-quarter earnings on October 29, 2026. The report is the next scheduled checkpoint for investors tracking the turnaround’s progress.

Source: Blockonomi