Can Significant Capital Infusions Drive Innovation in Intel Chips?

Intel Corporation INTC recently secured a $5 billion investment from NVIDIA Corporation NVDA to jointly develop cutting-edge solutions that are likely to play an integral role in the evolution of the AI (artificial intelligence) infrastructure ecosystem. Leveraging the core strengths of both firms, namely NVIDIA’s AI and accelerated computing and Intel’s CPU technologies and x86 ecosystem, the collaboration is expected to sow the seeds of innovation through the development of state-of-the-art custom data center and PC products. 

In August 2025, Softbank invested $2 billion in Intel to propel AI research and development initiatives that support digital transformation, cloud computing and next-generation infrastructure. The investment enabled Softbank to gain about 2% ownership in Intel, with the former paying $23 per share. This followed $7.86 billion in direct funding from the U.S. Department of Commerce under the U.S. CHIPS and Science Act to advance critical semiconductor manufacturing and advanced packaging projects in Arizona, New Mexico, Ohio and Oregon. 

The significant capital infusions will enable Intel to expand its manufacturing capacity to accelerate its IDM 2.0 (Integrated Device Manufacturing) strategy. Interim management is committed to keeping the core strategy unchanged despite efforts to drive operational efficiency and agility. The company is emphasizing the diligent execution of operational goals to establish itself as a leading foundry. It is focusing on simplifying parts of its portfolio to unlock efficiencies and create value.

Other Semiconductor Firms Likely to Gain

NVIDIA is likely to gain significant funding for scaling AI infrastructure across federal agencies, research labs and public-private data centers. Federal tax credits and grants for domestic AI training hubs are expected to accelerate demand for NVIDIA’s H100, GH200 and Blackwell chips, strengthening its market position as a trusted AI chip provider. The security-grade GPU/IP validation may further open up new federal and defense AI applications for NVIDIA, adding billions in addressable market size.

Advanced Micro Devices, Inc.’s AMD AI and high-performance CPU portfolio aligns perfectly with the One Big Beautiful Bill push for AI data center expansion across healthcare, national labs and the telecom sector. Advanced Micro is likely to gain healthy funds for expanding its domestic manufacturing operations to deploy chips in AI-enabled base stations, radio access nodes and autonomous IoT gateways. In addition, R&D hubs in Santa Clara, CA, and  Austin, TX, qualify Advanced Micro for enhanced R&D credits.

INTC’s Price Performance, Valuation and Estimates

Intel shares have gained 39.9% over the past year compared with the industry’s growth of 41.4%.

Going by the price/sales ratio, the company's shares currently trade at 2.50 forward sales, lower than 13.97 for the industry. 

Earnings estimates have decreased 46.4% to 15 cents per share for 2025 and 5.6% to 68 cents for 2026 over the past 60 days.

Intel currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. 

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This article originally published on Zacks Investment Research (zacks.com).

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