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.

The Intel bulls have been a bit desperate for some good news to counter all the negativity for some time now. They recently got some in the form of two new announcements about Intel's foundry division. The news sparked a 9.2% jump in the stock price over two days (Sept. 16-17).

Shares of Intel are surging before the opening bell after the chipmaker said its foundry business would make some custom artificial intelligence chips for Amazon Web Services as it attempts to reinvigorate its business.

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.