TLDR
- Intel stock surged 43% over six trading days, closing at a five-year high not seen since April 2021.
- Intel joined Tesla and SpaceX’s Terafab project, aimed at producing 1 terawatt per year of compute for AI and robotics.
- Intel repurchased Apollo Global Management’s stake in its Irish chip factory, sending the stock up 9% that day.
- The stock is up over 170% in the past 12 months, trading at a 117.4× forward P/E.
- Despite the rally, analysts flag falling revenue, declining EPS, and negative free cash flow as ongoing concerns.
Intel has had a week most stocks only dream about. The chipmaker closed Wednesday at its highest level since April 23, 2021, capping a six-day run that added 43% to its value. Over the past 12 months, the stock is up more than 170%.
By Thursday premarket, though, the streak showed signs of strain. Intel was pointing 1.7% lower, pulled down by broader market weakness and uncertainty around a U.S.-Iran ceasefire agreement.
The run started picking up steam when Intel announced it was joining Elon Musk’s Terafab project — a semiconductor production initiative run alongside Tesla and SpaceX.
“Our ability to design, fabricate, and package ultra-high-performance chips at scale will help accelerate Terafab’s aim to produce 1 terawatt per year of compute to power future advances in AI and robotics,” Intel said in a statement.
Musk has called Terafab “the most epic chip building exercise in history.” Intel’s involvement gave the stock a clear shot of momentum.
The second major catalyst came last week. Intel struck a deal to buy back full ownership of its chip factory in Ireland, repurchasing Apollo Global Management’s stake in the joint venture. The stock jumped 9% on that news alone.
Revenue and Earnings Tell a Different Story
Not everyone is rushing to buy the dip. Some analysts are hitting pause despite the rally.
Intel’s revenue has fallen at a 6.2% annual rate over the past five years. EPS dropped 40.1% annually over the same period — a steeper fall than revenue, pointing to a cost structure that hasn’t kept pace with shrinking demand.
Free cash flow margin fell 18.3 percentage points over five years. For the trailing 12 months, Intel’s free cash flow margin sits at negative 3%.
Valuation Raises Eyebrows
After the surge, Intel trades at 117.4× forward P/E. That’s a high bar to clear for a company still working through structural challenges.
Some analysts say the optimism baked into that multiple leaves little room for error.
Intel did post solid quarterly results that contributed to the recent run-up, but the longer-term trend on revenue and earnings remains a concern for cautious investors.
As of Thursday morning, Intel was trading at $58.23 per share, with premarket activity suggesting a modest pullback following the six-day streak.
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