Intel's Foundry Segment Remains Unprofitable Despite Stock Gains
Despite Intel (INTC) stock surging by nearly 280% over the past year, its manufacturing arm continues to operate at a loss. In Q2 2026, the foundry segment reported $5.8 billion in revenue but an operating loss of $2.1 billion—most of which came from internal sales rather than external customers. This loss nearly offsets the profits generated by Intel's data center AI group during the same period. The company is investing heavily to improve its manufacturing efficiency, with wafer costs declining due to higher yields and better cycle times. However, capital expenditures are expected to exceed $20 billion in 2026 and rise further in 2027. Intel has roughly $30 billion in cash reserves and plans to monetize noncore assets if needed. The stock's high valuation—8.2 times sales—is predicated on the assumption that its foundry operations will eventually become profitable. For now, investors are betting heavily on a successful turnaround in AI-driven business segments.
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Topics: capital_expenditure foundry_operations semiconductors