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.

Shares of the chipmaker rose Tuesday, lifted by Monday night's update to CEO Pat Gelsinger’s plans to re-energize the company and reinvigorate the beleaguered stock.

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.

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.

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.

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.

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.

Fool.com contributor Parkev Tatevosian discusses the latest developments for Intel (NASDAQ: INTC) stock investors. *Stock prices used were the afternoon prices of Sept. 16, 2024. The video was published on Sept.