Intel (NASDAQ: INTC | INTC Price Prediction) shareholders have watched the stock climb 90.27% over the past year and 24.01% year-to-date. Those numbers frame the question: has Lip-Bu Tan, who stepped in as CEO in early 2025 following Pat Gelsinger’s ouster, actually turned Intel around, or has the market gotten ahead of the story?
The honest answer lies somewhere in between. Tan inherited a genuinely difficult situation: a costly foundry buildout bleeding cash, Advanced Micro Devices (NASDAQ: AMD) chipping away at CPU market share, Nvidia (NASDAQ: NVDA) dominating AI accelerators, and a workforce that had endured years of strategic whiplash. His first year was defined by painful but necessary triage.
What Changed
The most visible shift was cost discipline. Headcount fell from roughly 125,200 when Tan arrived to 85,100 by year-end, a reduction driven by a 15% workforce cut announced in Q2 that carried a $1.9 billion restructuring charge. Capital expenditures dropped to $17.672 billion for the full year, down 26% from prior guidance. Non-GAAP operating expenses fell to $16.5 billion, down 15% versus 2024.
The financial trajectory improved meaningfully. Full-year operating income came in at −$2.214 billion, an 81% improvement year-over-year. Operating cash flow reached $9.697 billion, up 17%. Cash on the balance sheet grew to $14.265 billion, up 73% year-over-year, aided by the Altera partial divestiture, Mobileye share sales, a $5.70 billion CHIPS Act disbursement, and equity investments from Nvidia ($5.0 billion) and SoftBank ($2.0 billion).
The Intel 18A process node moved from production wafer starts in Arizona in Q2 to a fully operational fab by Q3. By Q4, the first products on 18A shipped. Tan was direct about what remains unfinished: “Yields continue to improve steadily…they are still below what I want them to be.”
Where the Skeptic Case Lives
Intel’s foundry business lost money every single quarter: −$2.32 billion in Q1, −$3.2 billion in Q2, −$2.3 billion in Q3, and −$2.51 billion in Q4. There is no disclosed timeline to foundry profitability, but management has targeted breakeven by late 2027 or early 2028. The Intel 14A node faces a real risk of being paused if no significant external customer commits. The stock is still down 23.49% over five years, a reminder that Intel’s structural challenges predate Tan and will not resolve in 12 months.
Analyst consensus reflects this tension: 33 of 48 analyst ratings are Holds, with nine Buys and six Sells. The $47.11 average price target represents modest upside from current levels.
The Verdict
Tan has done what a credible turnaround CEO does in year one: stabilized the balance sheet, reset cost expectations, made painful structural cuts, and delivered a manufacturing milestone the prior regime promised but failed to ship. He has earned Intel a seat at the AI table, evidenced by hyperscaler demand exceeding supply and DCAI posting 9% year-over-year growth in Q4. But the foundry losses are real, the margin recovery is incomplete, and Tan himself acknowledged this plainly: “We are on a multiyear journey. It will take time and resolve.”
Year one grade: credibility restored, but victory is still pending.
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