Key takeout
- Intel (INTC) has jumped 10% following the appointment of Lip-Bu Tan as CEO, raising hopes for a turnaround by 2025.
- The company’s $50 billion investment in upgrading its chip facilities and strong US presence offer some resilience amid ongoing trade challenges.
- While first quarter revenue hit $12.7 billion, Intel’s profit margin stands at a troubling -36.2%, signaling ongoing financial issues.
Intel Corporation (INTC) saw its stock plummet by 70% after entering the chip foundry market, but there’s been a recent 10% uptick in share prices with Tan’s appointment as CEO sparking speculation about a potential recovery. Is now the right moment to invest? Let’s explore.
Intel’s Potential Comeback in 2025
Intel, alongside Nvidia Corporation (NVDA), is a major player in supplying GPUs necessary for modern computing tasks like machine learning and AI. It’s important to note that Nvidia’s products, particularly their CUDA software and Blackwell Chips, are incredibly popular among developers and customers. This has allowed Nvidia to dominate many AI markets, including data centers.
Sure, competing with Nvidia isn’t easy for Intel, but Intel’s market cap is under $100 billion compared to Nvidia’s impressive $3 trillion, which gives Intel more room to grow. Additionally, they’ve developed more affordable AI accelerators that could rival Nvidia’s offerings. The company has made considerable investments—billions really—into improving its AI capabilities, possibly allowing them to enter the market with energy-efficient chips.
In the last two years, Intel has committed over $50 billion to upgrading its chip manufacturing facilities. Though these costs have made investors uneasy given the current unprofitability of some casting ventures, Intel’s Foundry Business now faces stiff competition from Taiwan Semiconductor Manufacturing Company Limited (TSM) and Samsung.
Both TSMC and Samsung operate manufacturing facilities in China. Amid ongoing trade tensions between the US and China, there’s a risk of disruptions for those companies. Intel, however, primarily boasts manufacturing centers in the US, which means they can fulfill domestic semiconductor orders without the hindrance of trade restrictions.
Though Intel has fallen behind other semiconductor leaders, they still managed to generate $12.7 billion in revenue for Q1 2025, outperforming Advanced Micro Devices, Inc (AMD) which brought in $7.4 billion. This suggests Intel is making headway in the semiconductor sector and setting itself up for a comeback.
Lastly, Lip-Bu Tan’s new role as CEO has been met with favorable reviews from experts, largely due to his successful history in the semiconductor field. His plans to streamline operations and enhance AI platforms are expected to help stabilize Intel and potentially restore its former glory.
Should You Buy Intel Stock Now?
Holding onto INTC stock may be a sound strategy since Intel’s Foundry Recovery under Tan shows promise with cost advantages. Optimism among market brokers is evident, as they have ramped up INTC’s short-term price target from $20.48 to $22.42—an increase of 9.5%. The highest price target jumps to $62, suggesting an eye-popping potential rise of 202.7%.
However, one should be mindful that Intel’s net profit margin is still sitting at -36.2%, while the average in the semiconductor industry hovers around 49.5%. This points to ongoing financial struggles, so it might be wise for potential investors to wait for clearer signs of financial improvement before diving into INTC stocks.
Intel currently holds a Zacks Rank of #3 (hold). You can find a complete list of today’s Zacks Rank #1 (Strong Buy) stocks.
