Intel's stock has rallied on growing enthusiasm for a turnaround, but there are still questions about how quickly that can manifest.

In a reversal of fortunes, Intel's stock has been one of the chip sector's best performers so far in the third quarter, and on the year as well. The company has made an effort to revive its faltering business, tapping outside assistance from the government and Nvidia while working to improve its technology.

But Intel shares were bucking the chip sector's rally on Monday - falling 2.9% while the Philadelphia Semiconductor Index was up 0.2%, and as more artificial-intelligence-focused chip plays like Nvidia's stock were seeing bigger gains.

Intel's underperformance Monday could partly reflect a pullback after a strong Friday rally fueled by a report that the Trump administration is considering a plan to make U.S. companies manufacture the same amount of chips stateside that customers are importing from abroad. GLOBALFOUNDRIES Inc.'s stock rose as well on Friday, and was continuing its rise on Monday.

Deutsche Bank analysts led by Ross Seymore see a mixed story for Intel, noting on one hand the "aggressive steps taken by the company which may continue." Nvidia recently announced a collaboration to design and manufacture chips with the company and said it would make a $5 billion investment in Intel's stock, but future partnerships in the sector could be more foundry-oriented.

"From a high level, these actions continue to reflect CEO Lip-Bu Tan's aggressive pursuit of strengthening the company's balance sheet at all costs, a strategy that we applaud as [Intel] continues to exist in a period of high investment for both their product road map and the continued development of [Intel Foundry Services]," the Deutsche Bank analysts wrote.

Intel shares have "clearly reacted favorably" to Tan's strategy, they added, and are trading at about 29x the analysts' pro forma earnings per share of $1.20 for calendar-year 2027.

However, the analysts said the "true financial benefit" of Intel's recent moves will likely not have an impact until at least 2028. The Deutsche Bank team noted they will continue waiting to see positive key performance indicators around the company's product and foundry initiatives, which include its server central processing units with Nvidia and a customer for IFS's upcoming 14A process node.

While they boosted their price target to $30 from $23 in their Sunday note, they kept a hold rating on the stock, and the new target is below the $34.53 level where shares recently changed hands.

The partnership with Nvidia followed Intel's agreement in August to let the U.S. government take a 10% stake in its struggling business. The company said that the $8.9 billion government investment in its common stock reflects "the confidence the administration has in Intel to advance key national priorities and the critically important role the company plays in expanding the domestic semiconductor industry."

The investment from Nvidia has prompted speculation on Wall Street that other tech titans could soon come to Intel's rescue.

Intel asked Apple Inc. for an investment, and the two companies have discussed working together closely, Bloomberg News reported last week. However, the talks are still early and could lead to nothing, unnamed people told Bloomberg.

"Intel has already received support from the U.S. government and Nvidia, and by adding Apple, it can establish its future as the key provider of semi fabrication in the U.S.," D.A. Davidson head of technology research Gil Luria previously told MarketWatch.

Luria noted that Intel doesn't have anchor customers for its next-generation 14A processing node, putting "the future of the company in doubt." Intel previously said in a 10-Q filing that if it doesn't find a significant customer for 14A, it could stop developing and manufacturing the process node and following ones. With Apple, Luria said Intel "would have the two biggest consumers of semi fabrication lined up to support its U.S. production."

The Bloomberg report also said that Intel has sought potential investments and manufacturing partnerships with other companies.

One of those companies was reported by the Wall Street Journal to be Taiwan Semiconductor Manufacturing. However, the Taipei Times reported on Saturday that TSMC denied the Journal's report on discussions with Intel. That could be another factor weighing on Intel's stock on Monday.

Analysts at Seaport Research said they see opportunities for mergers and acquisitions in the semiconductor sector into next year, given lowering interest rates and all-time highs for numerous chip stocks. The Seaport team said that although they have "no inside information about pending deals," the current "setup for deal activity looks very similar to past periods where deals picked up."

Intel has "the largest question mark" hanging over it, the analysts noted. For now, they don't think there will be a buyer for the chip maker "without some form of resolution to the company's fabs and Intel Foundry."

To stay competitive, Seaport estimates that Intel would need a $60 billion investment, and another $20 billion in working capital. And without resources to help itself, the analysts said they see "very few options" for Intel.

"At this point, it does not seem like there is any more money directly available from the government," the Seaport analysts wrote - adding that they still expect potential customers to invest in the near term following Nvidia and SoftBank Group Corp., which invested $2 billion in August. They floated Apple, Alphabet Inc.'s Google, Microsoft and Broadcom as "sensible sources of funding."

In Seaport's view, Intel's board would likely prefer an investment or sale of its fabs to TSMC. That "would require 'encouragement'" on behalf of the U.S. government, the analysts said, which they see as a possibility.