Intel 18A-P enters risk production; Bernstein raises price target to $100 on CPU demand tailwinds

Intel announced Tuesday that its most-advanced chip node, 18A-P, has entered risk production at the VLSI Symposium in Honolulu. 18A-P offers approximately 9% higher performance or 18% lower power compared to 18A, with better thermals and design-rule compatibility. The milestone represents a major step toward Intel's foundry ambitions, particularly the long-rumored deal with Apple: Intel CEO Lip-Bu Tan told CNBC in May that he expects commitments from multiple foundry customers in the second half of 2026. The advance comes as Bernstein raised its Intel price target to $100 from $65, driven by bullish sentiment on CPU demand.

The analyst upgrade reflects growing recognition of Intel's role in the CPU-driven portion of the AI buildout. According to recent analysis, agentic AI systems and reasoning workloads are sparking a CPU revival, creating demand for general-purpose processors beyond GPUs. Intel stock has been on a remarkable run: up over 200% year-to-date following government support (a 10% U.S. stake in August 2025 and NVIDIA's $5 billion investment in September 2025). Intel is currently trialing Apple's M7 chip on the 18A-P node to assess manufacturing capability, yield, and process consistency.

For architects, the 18A-P risk production milestone is significant because it narrows the path to Apple's deal—Apple is likely to wait to make chips on 18A-P, not on the prior 18A node. However, a major technical hurdle remains: Intel primarily manufactures chips on traditional x86 instruction sets, while custom chips from Apple, Google, Amazon and others are made on rival Arm architecture, which Intel has not yet mastered. The ramp of 18A-P capacity and yield will determine whether Intel can actually win and retain foundry business at scale.

The market is pricing in meaningful upside if 18A execution lands on schedule. If Intel hits its 2027 margin target after 18A ramps, the stock could rerate to 35 times forward earnings, implying further significant upside even from current price levels. The risk is execution: Intel must hit promised yields and gross margins in 2027 while competing against TSMC's unmatched ARM foundry track record and securing customer commitments in H2 2026.