TLDR
- Intel stock has surged 220% over the past 12 months, including a 58% gain over nine consecutive winning days
- CEO Lip-Bu Tan, who joined in March 2025, has cut over 20,000 jobs and returned the company to positive free cash flow
- Nvidia invested $5 billion in Intel in September, with Intel set to make custom x86 server CPUs for Nvidia products
- TD Cowen raised its price target from $50 to $60 on April 9, but kept a Hold rating, citing valuation concerns
- Some analysts see a path to $150 per share — roughly 140% upside from recent levels — if margins recover and revenue grows
Intel stock has had a run that most investors only dream about. Coming into Tuesday, the chipmaker had just closed out a nine-day winning streak, tacking on 58% in that stretch alone. Over the past 12 months, the stock is up 220%.
Then it dropped 2.1% on Tuesday, closing at $63.81. That kind of pullback after such a run is hardly surprising.
So the question now is whether there’s anything left in the tank — or whether the easy money is already made.
The case for Intel starts with how far it had fallen. The stock hit a multiyear low below $18 in June 2025, below book value, after years of missed transitions in chip manufacturing, the shift to mobile, and the rise of GPUs over CPUs. The company, which earned over $10 billion in operating profit in 2000 on $34 billion in sales, lost $2.2 billion in 2025 on $53 billion in revenue. Five CEOs couldn’t fix it.
A New Leader Makes His Mark
Lip-Bu Tan took over in March 2025, and the moves came fast. He cut more than 20,000 employees, slashed cash burn, and pushed Intel back into positive free cash flow in the second half of 2025. That’s a meaningful shift from the cumulative negative $44 billion in free cash flow Intel burned through between 2022 and 2025.
Tan’s background is in turnarounds. He ran Cadence Design Systems for 12 years, during which the stock gained over 3,200%.
Intel is now in active partnerships with Alphabet on AI and cloud infrastructure. It’s also set to help Elon Musk build and operate “Terafab,” a chip-making joint venture between SpaceX and Tesla.
The Nvidia deal is one of the more eye-catching developments. In September, Nvidia invested $5 billion in Intel, which will produce custom x86 server CPUs that pair with Nvidia’s GPUs. As Melius Research analyst Ben Reitzes put it: “The demand for the x86 server CPU has gone through the roof at hyperscalers.”
Valuation Is The Sticking Point
At current prices, Intel trades at around 95 times expected earnings over the next 12 months. That’s higher than Nvidia, Taiwan Semi, Broadcom, and AMD. On the surface, that’s a tough sell.
But earnings are at a cyclical low. Expected EPS for 2026 sits around 50 cents, well down from nearly $5.50 in 2021. Gross margins in 2025 were below 40%, compared to 55% at Taiwan Semi and 75% at Nvidia. Part of that is structural — Intel is currently paying Taiwan Semi to make roughly 30% of its wafers while building up its own fab capacity.
Manufacturing yields on Intel’s newest process are also lagging. Taiwan Semi is estimated at around 90%; Intel is around 70%. Closing that gap would add a meaningful stream of cash flow.
TD Cowen raised its price target to $60 from $50 on April 9, but held its Hold rating. The firm flagged Intel’s insulation from Taiwan Semi bottlenecks as a short-term positive for server CPU demand, but said valuation — around 63 times 2027 EPS — remains hard to justify.
Only about one in five analysts covering Intel has a Buy rating on the stock, well below the 55% average for S&P 500 names. Reitzes, who upgraded to Buy in January with a $75 target, is among the optimists. He sees a potential path to $150 if Intel hits $7 in EPS by 2029 and trades at a normal semiconductor multiple.
Intel’s market cap sits at $320 billion — less than AMD’s $415 billion, despite Intel having 50% more in revenue.
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