The primary change of strategy that Intel is currently experiencing is very significant. The firm is retreating from its ambitious 18A chip process and switching its focus to the sensible 14A node.
The decision follows tough competition increasing production expenses and low yields in the development of the 18A path. The ruling is indicative of a departure: emphasize effectiveness, eliminate redundancies and strive to regain solid economic balance.

The 14A plan cannot be considered as a backup. Intel hopes that this new strategy will be able to reestablish trust and effectiveness. Advanced High-NA EUV lithography at 14A node is the enabled work of twin scan exe:5000 tool. The first machine that Intel had already installed was the Oregon D1X facility. The firm is hopeful that the introduction of newer technologies such as the Ribbon and backside power delivery into 14A will open up the door to the giant clients of its cloud services who are ever in need of solutions that consume less power.

Nevertheless, it is not expected that the full implementation will be done until 2027. Until that time, Intel will still be producing panther lake chips using the 18A process which will remain costly to the company in the short run. A massive reduction in the workforce is one of the most significant alterations. Intel is currently cutting off close to a quarter of its employees – 21%,  in an attempt to reduce its workforce to where it was before 2020. The idea is to enhance revenue per head and increase margins which have been unsatisfactory over the years. The gross margin has remained at the low level of around 33% which is half of what it used to be.

A new cost-cutting initiative at Intel would enable the company to increase those figures and regain the trust of investors. There are also bold moves made by the new CEO, Lip-Bu Tan. Noted to be knowledgeable with Cadence and strong contacts in the semiconductor industry. Tan is trimming off products whose performance has been performing sourly such as the automobiles chip line of Intel. His strategy is also apparent: cut expenditures where it is obvious to cut spending, think of what is realizable and balance the sheet.

The market is hopeful so far. The early alterations and entry of Tan were already interpreted to say that Intel is serious about getting its problems tackled. The forecast is shockingly poor in the case of Q2 2025. Researchers are forecasting an EPS of only $.0093, or more than a 50% decrease versus a year ago. This low expectation might be in Intel’s favor. The company has already exceeded expectations in Q1 and if it continues to report a flat performance in Q2 it might exceed market expectations and lift the stock.

Its revenue pressings are set at $11.8 billion and gross margins of about 36.5% which would have been a step ahead. In prospect the assessment of the stock price has a target of about 20% upside or around $28 per share. This is assuming that Intel can do margin improvement and fulfill the 14A promise. Its stock has gained just 14% this year after lagging many technology peers so a catch-up rally. If all goes well, it is possible too.

The data on insider trading reflects a somewhat ambivalent situation combining thin negatives. The big sales by the executives have not been made and a few minor purchases indicate that they expect a new direction. However, investors would feel better when the insider buying was stronger. Nevertheless, dangers are present. Intel will be forced to retain certain investments in 18A until 2026 and its agreements with giants such as Microsoft and Amazon shall stretch the margins further. In the meantime, competitors such as AMD and NVIDIA are gaining traction rapidly in the fields of AI and graphics chips which Intel continues to fall behind.

The bottom line is Intel is not currently a growth stock but it is poised to mount a comeback. The expenses are now reduced, the strategy simplified and the expectation low so even a minor victory in Q2 can make stocks hit the sky. It is a dangerous course but the payoff may be worth the undertaking by investors seeking a turnaround trade.