Shares of chip-giant Intel (INTC -2.20%) have been obliterated over the past few years. Unfortunately, years of mismanagement and complacency opened the door for TSMC to take the lead in semiconductor manufacturing and AMD to stage an epic comeback. Intel still leads the market for PC and server central processing units (CPUs), but its dominance has been severely eroded.

Intel's attempted turnaround effort, led by former CEO Pat Gelsinger, is now in flux after Gelsinger's surprise retirement in late 2024. As Intel searches for a new CEO and a new strategy, the company is fighting on two fronts.

First, Intel is charging ahead with its foundry investments, with plans to bring its advanced Intel 18A process to volume production later this year. Second, the company is attempting to stabilize its CPU market share with new products.

There's a tremendous amount of uncertainty surrounding Intel stock right now, but the picture should be much clearer in 2026.

Clarity on the foundry effort

Intel has invested heavily in new manufacturing facilities and equipment as part of an audacious plan to challenge TSMC in the foundry market. The final process node in the company's original foundry roadmap, Intel 18A, is set to go into volume production later this year.

The fate of Intel's foundry business rests on Intel 18A. The company has scored some major customers for the process, including Microsoft and Amazon, but it's going to need a steady stream of additional customer wins for these foundry investments to pay off. Intel also plans to use Intel 18A for its own products, so the process will need to be competitive for the company's product segment to thrive.

By this time next year, it should be clearer whether Intel 18A can turn the foundry business into a major success.

A mixed bag in the product business

In the PC CPU business, Intel is struggling to put out desktop chips that can compete with AMD. Intel's latest Arrow Lake CPUs are solid performers, in general, but fall flat in gaming workloads. Its previous Raptor Lake chips are powerful, but also power-hungry and prone to instability issues.

The good news for Intel is that its laptop CPUs are far more competitive. Early reviews of the company's Arrow Lake laptop chips have been exceptionally positive, with the chips providing best-in-class performance and great battery life. Arrow Lake should help Intel reclaim some market share, and the Intel 18A-based Panther Lake can build on those gains later this year.

In the server CPU market, Intel is getting aggressive. The company's Granite Rapids CPUs are powerful and have largely closed the performance gap with AMD, but Intel initially priced them well above the competition. The company recently lowered list prices dramatically for Granite Rapids, a potential sign that it's willing to sacrifice margins to go after market share.

New server CPUs aren't coming until 2026, so Granite Rapids and the efficiency-focused Sierra Forest will be what Intel has to work with as it tries to claw back lost market share.

High risk, high reward

Intel stock could go nowhere over the next year if the company fails to make progress winning back market share or if Intel 18A doesn't begin to bring in more foundry customers. However, given how far Intel stock has fallen, it won't take much good news to send shares soaring.

In particular, if Intel 18A enables Intel to launch PC chips that handily beat the competition, it would be a win for both the product and foundry businesses. In 2026, Intel could then build on that momentum with its first server CPUs built on the Intel 18A process.

There's also a chance that Intel will spin off its foundry business over the next year. Given that the foundry will consume a lot of capital as it marches toward profitability over the next few years, which is currently provided by the product business, a spin-off looks unlikely. But you never know.

Given the market sentiment around Intel right now, a spin-off would probably drive the stock higher, at least in the short term. Some sort of acquisition that splits up the company is also a possibility.

A lot is going to change for Intel in 2025. The company will get a new CEO, set course on a new strategy, and complete its initial foundry roadmap. With the stock trading below book value -- an incredibly pessimistic valuation -- Intel stock has the potential to soar if the company's results begin to improve.