As of this month, Intel (INTC) stock is again trading at nearly $38 per share, more than double its 2024 low of around $17. For now, this rally appears largely driven by narrative, as the company’s fundamentals remain under pressure. The last time we saw the stock trading at such levels was back in April 2024. Could the legacy chipmaker be staging a bit of a comeback? The answer, it seems, is possibly.
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The outlook could shift meaningfully over the long term—particularly following Intel’s historic partnership with the U.S. government and Nvidia’s (NVDA) $5 billion investment in the company. While near-term valuation concerns persist, I remain long-term Bullish on Intel’s prospects.
Big Deals Make for Big Returns
You may have read that Washington has agreed with Intel to convert $8.9 billion in CHIPS Act and Secure Enclave grants into approximately 433.3 million shares of Intel common stock at $20.47 per share. This gives the government a 9.9% non-voting equity stake, effectively turning the U.S. government into one of Intel’s largest shareholders.
Evidently, this deal provides long-term support from the most powerful Western institution. However, it’s not all roses for Intel. With 76% of revenue coming from outside the U.S. and 29% from China, foreign partners may be concerned about U.S. political influence. Personally, I think the deal is just what Intel needed; soft oversight can’t hurt a company that’s been struggling to turn itself around for years from a legacy chip company into a vertically integrated Western semiconductor powerhouse.
Nvidia followed in September, shortly after the Washington deal was announced in August. With Nvidia acquiring 4% of the company and forming a partnership to develop joint AI infrastructure and personal-computer products, the bullish tone has only continued. SoftBank (SFTBY) also agreed to buy $2 billion of Intel stock at $23 per share in August. In essence, we’re looking at multilateral major backing by some of the tech industry’s top players, setting up a very compelling long-term upside case indeed.
A Foundry Underdog on Its Way Back Up
One of the biggest draws of Intel stock at the moment is its nascent position as a key Western semiconductor manufacturing asset. This has been a source of endless speculation in the markets. Rumors have surfaced that AMD (AMD), Samsung (SSNLF), or other top chip designers might become foundry customers or take stakes in Intel. The announcements of the Washington partnership and the Nvidia deal acted as the spark that ignited Intel’s rally.
These catalysts fueled a swift catch-up surge for INTC, which had trailed its AI-focused peers for months. Now, Intel’s stock has once again pulled ahead of the broader market, comfortably outperforming the S&P 500 (SPX).
The primary catalyst moving forward to take the stock even higher will be the company’s booking of its first major foundry deals with external chip designers, as well as direct confirmation that AMD will choose to manufacture top-end chips at Intel. The company’s flagship 18A/14A nodes used in top-end chip manufacturing will need to demonstrate competitive performance at scale for partnerships to bear real long-term fruit. Progress on new fabs in Arizona will also be crucial to watch for.
In my view, sustained positive free cash flow will ultimately provide the strongest foundation for Intel’s market support. For now, the combination of a challenging turnaround and heavy capital expenditures has discouraged many fundamental investors, leaving the stage largely to speculators and deep-value players. Once Intel begins to deliver consistent financial gains alongside its improving narrative, the company could evolve into a stable compounder—signaling the completion of its turnaround.
Fundamentals Always Anchor the Story
Intel’s growth is currently nothing short of lackluster. Year-over-year revenue growth is negative, at -3.7%, compared to 6.9% for the sector. Moreover, the consensus shows that forward-diluted EPS growth is also negative, at -15.8%, compared to +11% for the sector. However, for the full-year Fiscal 2026, the company’s normalized EPS is expected to turn positive unless there are further operational delays.
At this juncture, we are likely to see the stock’s price compound upward aggressively, so buying now at around $30/share is not only prudent but also good value. I don’t know if we will see a retrace to $30 or lower in the next few months, but if we do, I’m a buyer at those levels.
However, if management falters in execution and the foundry’s output fails to meet expectations, losses could continue to mount—leaving investors stuck in a potential value trap. It’s important to remember that each new manufacturing facility carries billions in depreciation costs long before it generates meaningful revenue, and political backing doesn’t automatically translate into financial strength.
In short, Washington’s support ensures survival, but not efficiency—at least not without effective guidance from passive government stakeholders. That leaves plenty of room for things to work out unexpectedly.
Is Intel a Buy, Hold, or Sell?
Wall Street remains skeptical of Intel’s recent moves, with an average price target of $26.83—implying roughly 28% downside over the next 12 months. This consensus reflects 2 Buy ratings, 27 Holds, and 5 Sells. However, I take a more optimistic view, anticipating that after a period of price consolidation and modest pullback, Intel could reach above $40 per share within the next 18 months.
High-Risk, High-Reward Bet on the Revival of Western Chipmaking
Intel may not be the kind of low-risk compounder that merits a dominant place in most portfolios, but it does deserve recognition as a small, high-risk, high-reward position—a bold wager on the revival of Western semiconductor manufacturing, supported by industry heavyweights and the U.S. government itself.
Returns are unlikely to be linear, but I believe they could be substantial. After a healthy short-term pullback to more reasonable levels, I’m targeting $40+ by 2027, confident that coordinated execution and strategic partnerships could transform Intel from a downtrodden legacy player into a true turnaround success story.