Intel will produce the specialized "AI fabric chip" for Amazon, using its 18A manufacturing process, which is the company’s most advanced chip manufacturing technology.

Investors hoping that support from the U.S. government will power Intel's turnaround got some good news recently.

Intel Corp (NASDAQ:INTC) stock maintained upward momentum on Tuesday, a day after CEO Pat Gelsinger clarified its restructuring stance, bagged a multi-year, multi-billion-dollar U.S. chipmaking deal from existing customer Amazon.

While the broader Dow Jones Industrial Average ($DOWI) is trading at all-time highs, semiconductor giant Intel (INTC) is trailing the broader markets by a wide margin. The tech stock is down 70% from all-time highs after falling close to 58% in 2024.

Intel has struggled in large part due to its foundry business struggles. Spinning off the foundry business could help remove a big anchor on the stock. The core product business has been holding up and is cheap on a standalone basis.

We have tripled our deal pipeline since the beginning of the year,” CEO Pat Gelsinger said of Intel Foundry’s business in a blog post, noting that the AWS deal could potentially involve additional chip designs.