Shares of Intel jumped +3.2% to $87.24 after reports surfaced that Google plans to use Intel's chip packaging technology for its next-generation AI processors. The stock has now rocketed roughly 34% in a single week — from $65.27 on April 22 — as a cascade of foundry wins reshapes investor sentiment around a company long left behind in the AI race.
Google's AI Chips Need a Builder, and TSMC Can't Do It All
Google's next-gen TPU AI chips will reportedly use Intel's advanced packaging technology , a process that assembles smaller chip components into one powerful unit. TSMC currently leads with its own packaging method, but capacity is tight, and most of it is already booked for GPUs.
Intel is the sole provider of this kind of packaging in America , giving it a geographic edge as U.S. tech giants seek domestic supply chains.
The Money Could Be Enormous — If Deals Actually Close
CFO David Zinsner told CNBC he's confident advanced packaging will bring in billions of dollars per customer , a dramatic upgrade from earlier estimates of hundreds of millions. Intel says the packaging business can deliver 40% gross margins — a figure that matches its core product lines. For context, full-year 2025 external foundry revenue totaled just $307 million , so a single multi-billion-dollar deal would transform the unit's economics overnight.
The Foundry Is Still Bleeding Cash
The enthusiasm must be weighed against reality. Intel's Foundry division lost $10.3 billion on $17.8 billion in revenue for all of 2025 . CFO Zinsner says the business is still at least a year from breaking even, targeting exit 2027 at break-even operating margins. Packaging revenue arrives faster than wafer-manufacturing deals, but it alone won't plug a $10 billion hole.
Validation Matters as Much as Revenue
Beyond dollars, a Google deal would signal to the market that Intel can serve other people's cutting-edge chips — not just its own. Intel's packaging customers already include Amazon, Cisco, SpaceX, and Tesla.
Production of Google's next chips using Intel packaging is expected around Q4 2027 , meaning revenue won't flow for roughly 18 months. Investors are pricing in a future that still requires flawless execution from a company that, as one analyst noted, "doesn't have the greatest reputation on that front."