Intel inventory has plunged 70% from its 2021 height. This is why this fallen tech large might be the semiconductor good buy no one’s staring at in 2025.
Intel (INTC -1.46%) was once the 800-pound gorilla of the semiconductor {industry}. In this day and age, the corporate previously referred to as Chipzilla has misplaced marketplace proportion in its maximum essential divisions and overlooked the bus to the substitute intelligence (AI) increase. On the identical time, Intel is leaning into its reasonably new chip production with a vengeance.
Can Intel’s up to date method make up for the missteps lately? Is the inventory poised for a turnaround within the subsequent 12 months or two? In brief, is Intel inventory a just right purchase at the moment?
Let’s in finding out.
The $50 billion wager that scared buyers away
Intel’s inventory has been suffering for a couple of years. Proportion costs peaked at a two-decade top in April that 12 months, sooner than beginning an extended and painful downturn. The plunge started with Intel’s Q1 2021 file, the place the corporate overwhelmed Wall Side road’s estimates but in addition published its brand-new chip foundry center of attention.
It is truthful to mention that the so-called foundry industry has been debatable from the beginning. The corporate spent greater than $50 billion on new and upgraded chip-making amenities over the past two years.
The ones infrastructure prices are scaring away many potential Intel buyers. The foundry department is not even turning a benefit but, and it faces super pageant from firmly established opponents Taiwan Semiconductor Production (TSM 0.39%) and Samsung (SSNL.F 9.01%). What if Intel’s large strategy-shifting funding seems to be a lifeless finish?
That is the major explanation why Intel’s inventory has fallen 70% from the April 2021 summit. No longer even the generative AI upsurge could make up for this dear thought within the reasonable Intel shareholder’s thoughts. Intel’s Gaudi line of AI accelerators can compete with Nvidia’s (NVDA -1.44%) industry-standard playing cards by way of being some distance less expensive, permitting device developers to pack many extra accelerators into every AI device. Beefy electrical expenses and boosted device cooling issues can undermine Intel’s value benefit, the usage of this manner.
Intel’s new id: Chipmaker for rent
So an Intel funding in 2025 is a lovely direct long-term wager at the chip-making foundry industry. Longtime challenger Complex Micro Gadgets (AMD -2.57%) has stolen Intel’s thunder within the central processor unit (CPU) markets for PC and server programs. Nvidia is operating away with the AI accelerator marketplace, adopted by way of a big pack of hungry up-and-comers. A turnaround is at all times imaginable, however this is not even what Intel is operating on these days.
On that notice, I feel it’s a must to perceive Intel’s chip-making ambition. This marketplace has been ruled by way of Taiwan Semiconductor for many years, with Samsung coming into the large-scale area extra not too long ago. Each corporations are primarily based in Southeast Asia, comfortably with regards to the tech production facilities in China and Taiwan. However this geographic focus is popping right into a legal responsibility in 2025, as Chinese language-American industry tensions stay flaring upper.
So Intel may change into the highest provider for American chip designers. Lots of the corporate’s chip-making amenities are scattered across the U.S., with wide production campuses in puts like Arizona and Oregon. Sending chip orders to those amenities will lend a hand home semiconductor corporations (and their device-building shoppers) keep away from price lists and industry restrictions on processors made in another country.
This is not even a brand new construction. Intel’s foundry plan introduced 4 years in the past, amid the coronavirus-driven chip production scarcity and an previous model of lately’s amplified industry conflicts.
Symbol supply: Getty Pictures.
Intel may well be the most efficient semiconductor deal of 2025
I will be able to’t promise that Intel’s foundry thought will determine ultimately. Alternatively, the semiconductor veteran has an excessive amount of long-tenured experience and an excessive amount of cash invested to take a mistaken flip right here.
And the inventory is priced for absolute crisis. Intel stocks are converting palms at 1.7 occasions gross sales and nil.9 occasions the corporate’s ebook worth. That is bargain-bin territory compared to Intel’s closest opponents:
Semiconductor Inventory
Worth to Gross sales (P/S)
Worth to E-book (P/B)
Marketplace Cap
Intel
1.7
0.9
$88.3 billion
AMD
6.9
3.3
$192.3 billion
Taiwan Semiconductor
10.9
7.6
$1,049.6 billion
Nvidia
23.3
41.3
$3,462.9 billion
Information taken from Finviz.com on June 4, 2025.
I am specifically intrigued by way of Intel’s rock-bottom worth to ebook worth. A determine underneath 1.0 means that buyers may well be higher served if the corporate merely close down its operations, offered all belongings, and returned that money to shareholders as a substitute. Tax results would make this an useless go out method typically, however you get the speculation — many buyers have simply given up hope for Intel.
And I feel that is a short-sighted view of Intel’s up to date method. In brief, Intel’s inventory looks as if a perfect purchase at those low proportion costs.
Anders Bylund has positions in Intel and Nvidia. The Motley Idiot has positions in and recommends Complex Micro Gadgets, Intel, Nvidia, and Taiwan Semiconductor Production. The Motley Idiot recommends the next choices: quick August 2025 $24 calls on Intel. The Motley Idiot has a disclosure coverage.
