Intel’s Record Rally Hides a Server Share Slide as Foundry Hopes Battle Competition

Intel’s stock finally erased the last trace of the dot-com bust this week, touching $133 on Wednesday and surpassing the all-time high set in August 2000. In euro terms, the shares closed at €99.43 before slipping 3.2% the following day to €99.37. Yet behind that milestone lies a contradictory picture: the same company that just shattered a 25-year-old record is also losing ground in the server market, where margins are fattest and growth prospects brightest.

The immediate catalyst for the rally was a report that Apple and Intel had reached a preliminary agreement for chip manufacturing using Intel’s 18A process. Neither company has confirmed specific products, but the deal would be a strategic coup for both sides. For Apple, it would reduce reliance on TSMC; for Intel, it would prove that its foundry push is gaining commercial traction, not just political support. The 18A process is already in commercial production in Chandler, Arizona, and yields are running ahead of internal projections, which lowers costs and improves margins.

But while investors cheered the foundry story, a UBS report underscored a quieter but persistent threat: Intel’s share of the server processor market fell to 54.9% in the first quarter, down from levels that once dominated the segment. AMD climbed to 27.4%, while Arm-based chips now account for nearly 18% of unit sales. The server market is booming — UBS forecasts it will reach $170 billion by 2030 — but Intel is ceding the fastest-growing portion to rivals. Major cloud providers are increasingly turning to Arm’s architecture, a shift that has already reshaped the competitive landscape.

Intel’s overall financial performance in the first quarter was strong. Revenue came in at $13.577 billion, $1.4 billion above the midpoint of the company’s own guidance. The foundry segment, however, posted an operating loss of $2.4 billion, a figure the market has so far dismissed as start-up costs for a long-term bet. For the current quarter, Intel guided revenue between $13.8 billion and $14.8 billion, well above the analyst consensus of $13.04 billion.

Should investors sell immediately? Or is it worth buying Intel?

The rally has been punishing for short sellers, who have racked up an estimated $12 billion in paper losses since the stock began its ascent. Technically, the shares remain in a strong position, trading well above both the short-term moving average of €57.26 and the long-term average of €37.84. From its spring low, Intel added more than $440 billion in market value.

Yet the rest of the business remains under pressure. Global notebook shipments plunged 27% in April, hitting Intel’s core PC division, which still provides the bulk of its earnings. The company’s virtual shareholder meeting this week focused on a “CPU renaissance” and foundry progress, but management also had to address the market share data.

Analysts are split on what the wild run means. HSBC downgraded Intel recently, citing the stock’s steep valuation after the surge. Deutsche Bank raised its price target to $100 while keeping a “hold” rating, acknowledging that the strong quarterly numbers support the case for a turnaround but that the server erosion warrants caution.

Intel at a turning point? This analysis reveals what investors need to know now.

Intel has closed the dot-com gap, but the next test is far more concrete. The company must demonstrate that 18A can attract not just one headline client but a steady stream of paying customers. Without the fast-growing server segment to fund the foundry build-out, the stock’s new high could prove more symbolic than sustainable.

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