Semiconductors · #28 in the Retail 100

Intel

INTC

Bond yields highest since 2002↓

Our rating: selllow conviction
12-month target: $65.70 +8.5%
Expected vs. S&P 500: -10 ptsSee the math
Next earnings: Jan 28In 84 daysEarnings calls page ↗

Data center chips now earn Intel about a third more profit than PC chips on less revenue, but PC chip sales are guided down over 20% next quarter.

Summary

Intel designs and builds its own processors for PCs and servers. Server chips are booming on AI demand, with data center revenue up 78% last quarter and supply, not demand, the limit. PC chip revenue is falling, though, and Intel's fourth-quarter forecast came in well below Wall Street's, so the stock fell 29% in a day. The long-term case still rests on outside customers filling Intel's costly new factories, which so far make chips almost only for Intel.

$60.55

+$22.45 (+58.92%)Past year

What Intel does

Intel designs PC and server processors and, unlike most rivals, makes them in its own factories. Those factories are costly, so Intel is trying to win other chip designers as customers.^25,33,35,34

What it sells

PC processors49% of revenue, Q3 2026
Core chips for laptops and desktops, sold mostly to PC makers. Still Intel's largest business by sales, but shrinking.
Server processors44% of revenue, Q3 2026
Xeon chips for cloud companies and businesses. Last quarter they earned about a third more operating profit than PC chips on less revenue.
Mobileye and other4% of revenue, Q3 2026
Mostly Mobileye, a separately listed maker of driver-assistance chips for carmakers. Intel owns 77% of it.
Foundry for others2% of revenue, Q3 2026
Making chips that other companies design. This is the bet behind Intel's turnaround, and the factory business still loses money.

Who buys it

PC and server makers buy most of Intel's chips. The three largest, including Dell and Lenovo, were 43% of 2025 revenue, so Intel's sales depend heavily on how many PCs and servers a few companies build.

Where you've seen it

The Intel Core sticker next to the keyboard on many Windows laptops.

The backstory

For years Intel fell behind TSMC in chipmaking and lost server customers to AMD. In 2024, under former CEO Pat Gelsinger, its factory business lost $13.4B. Since Lip-Bu Tan took over in March 2025, AI demand has lifted server chip sales, and revenue rose 21% last quarter. His plan is to fill Intel's factories with outside customers, funded by selling stakes to the government, Nvidia, SoftBank and public investors.

How the business makes money

Why Intel needs outside customers to fill its factories^{1,4,5,6,8,10,14,18,25,26,27,29,34,36}

Step 1
AI services need ordinary server chips too, and supply is tight. Data center revenue rose 78% last quarter, while PC chip revenue fell.
Step 2
Unlike most rivals, Intel makes its chips in its own factories, which cost about the same however full they are.
Step 3
Strong server sales lifted what Intel keeps to about 44¢ of each $1 of sales after the cost of making the chips.
Step 4
Its next factories cost about $20B this year and more next year, and pay off only if other chip designers become customers. So far almost all factory work is for Intel itself.
What shareholders get
Shareholders are paying in: shares outstanding rose about 6% in nine months, so each share owns less. The stock is betting outside customers arrive.

Advantages

Software already runs on Intel chips

Strong advantage

A real but shared advantage. Most PCs and servers run on x86 processors from Intel or AMD, so customers can add Intel chips without rewriting software.^4,10

Leading-edge factories in the U.S.

Strong advantage

Strategically valuable, though not yet profitable. Intel is the only American company making its own leading-edge processors in U.S. factories, one reason the government took a stake.^6,14,29

Investors with reasons to help

Supporting

Helpful, but not a lasting edge on its own. Nvidia invested $5B and is designing chips with Intel, and the U.S. government and SoftBank also hold stakes.^14,15,16

What's changing

Server demand is booming, but the PC business has cracked

Intel's fourth-quarter forecast fell well short of expectations because PC sales are dropping and an accident at its Israel factory will cost about $300M of revenue. Server chips remain short of supply, held back by wafers and packaging substrates. In August Intel raised $23B by selling new shares; it still needs customers to fill its new factories and will not name its 14A prospects.^{4,6,8,14,15,16,29,34,35,36,38,40}

Competitors

Who else an investor would consider, and how they compare.

Company	Market value	What it does	Compared with Intel
Intelthis stock	$319.81B	Intel designs PC and server processors and, unlike most rivals, makes them in its own factories. Those factories are costly, so Intel is trying to win other chip designers as customers.
AMDAMD	$867.61B	Designs x86 chips like Intel's but leaves the manufacturing to TSMC.	AMD only designs; Intel also makes chips, and its server growth is limited by supply.^1,17,36
TSMCTSM	$2.20T	Makes chips other companies design, such as Apple, Nvidia and AMD.	TSMC already has the outside customers and profits Intel Foundry is still chasing.
Arm HoldingsARM	$238.53B	Licenses chip designs to others, used in phones and cloud companies' own server chips.	Cloud companies' Arm-based chips compete directly with Intel's Xeon server chips.
Samsung Electronics (Korea-listed)private	—	Biggest memory chipmaker, also making other companies' chips, behind TSMC.	Samsung and Intel both pitch themselves as the alternative to TSMC.

Leadership

Who runs the company, and how the stock has done under the CEO.

INTC +133.6%S&P 500 +37.1%Total return with dividends since Mar 2025

2026

Lip-Bu TanCEO1.5 yrs

David ZinsnerEVP and CFO4.7 yrs, since 2022

Naga ChandrasekaranEVP, Chief Technology and Operations Of…9 mo

When Tan was named (Mar 2025), the stock moved +14.6% that day; the S&P 500 moved -1.3%.

Wall Street on Tan: MixedBernstein says Intel is pulling through under Tan after beating second-quarter forecasts. Morgan Stanley has low confidence in Intel's business making chips for other companies, which has yet to sign an outside customer.^L7,L8

Leadership sources (9) · researched Oct 2026

L1Intel Appoints Lip-Bu Tan as Chief Executive Officer · Intel Newsroom, 2025-03-12
L2Intel Names David Zinsner Executive Vice President and Chief Financial Officer · Business Wire, 2022-01-10
L3Naga Chandrasekaran (biography) · Intel, 2026-10-08
L4Intel Foundry boss leaves for Qualcomm — Naga Chandrasekaran takes charge of the unit · Tom's Hardware, 2026-02-27
L5Intel Announces Key Leadership Appointments to Accelerate Innovation and Strengthen Execution · Intel Investor Relations, 2025-09-08
L6Intel knows it needs to 'leapfrog' ARM and AMD, says CEO Lip-Bu Tan · The Register, 2026-07-24
L7INTC Stock Sees Price Target Hikes On Q2 Beat, But Analysts Say Key Foundry Catalyst 'Has Not Yet Arrived' · Stocktwits via Yahoo Finance, 2026-07-24
L8Bernstein raises Intel stock price target to $110 on strong Q2 beat · Investing.com, 2026-07-27
L9Intel's Price Targets Reveal Just How Much Is Riding on Its Turnaround · 24/7 Wall St., 2026-09-23

Bull vs. bear: two bets on the same stock

1
A share is a small slice of the company. Its value comes from the profits the company will make in the future.
2
Nobody knows those profits yet. Buyers (bulls) pay today's price betting they'll beat what most people expect. Sellers (bears) bet they'll fall short.
3
When results come in, the price moves toward whichever side was right, and that side makes money.

The question they disagree on

Will outside chip designers commit to 14A, Intel's upcoming manufacturing process, by mid-2027, moving a factory business that lost $1.9B last quarter toward break-even?^{1,3,4,5,6,7,8,14,15,16,19,29,30,34,35,36,38}

Bull case: why buyers buy

Chip designers commit real volume to 14A, filling Intel's new factories and shrinking foundry losses, so Intel profits from both designing and making chips.

14A has its first major outside taker. Musk's Terafab chip project in Austin, which Intel joined in April, plans to use it.
14A is keeping pace with TSMC. Intel pulled test production forward to the second half of 2027, in line with TSMC's schedule.
Talks with 14A customers continue. CEO Lip-Bu Tan said he is highly encouraged by progress with multiple potential customers, though Intel will not name them.
Intel has plenty of cash. It held about $54B in cash and short-term investments at the end of September, after raising $23B from a share sale in August.

Bear case: why sellers sell

If outside orders stay small, Intel keeps losing nearly $2B a quarter on its factories and funding them with new shares, while a shrinking PC business weakens its cash.

The factory business still runs on Intel's own chips. Only $411M of Intel Foundry's $6.7B revenue last quarter came from outsiders, mostly a nonrecurring program.
Shareholders keep paying for the build. Shares outstanding rose about 6% in nine months, and the CFO expects no positive free cash flow in 2027.
Terafab is promising but unproven. Tesla disclosed no volumes or dollar terms, and Musk is also talking to TSMC.
The PC business is shrinking fast. Intel guides PC chip revenue down more than 20% from the prior quarter and expects PC units to fall about 10% in 2027.

Where Delphi landssellWe think the bear case is more likely than today's price assumes.See why

What to watch

The numbers that will settle the debate.

Foundry outside revenue and operating loss■ unclear

$411M of outside revenue and a $1.85B operating loss in the third quarter, against $293M and $2.09B in the second. The CFO said the rise in outside revenue was mostly a nonrecurring program.^34,35,36

Shows whether companies other than Intel are paying to use its factories, and whether the loss is shrinking toward zero.

PC chip revenue▼ worsening

$8.1B in the third quarter, down 5% from a year earlier; Intel guides a fall of more than 20% from the prior quarter in the fourth.^34,36

PC chips are about half of sales and help fund the factory build.

Data center and AI revenue▲ improving

$7.3B in the third quarter, up 78% from a year earlier; Intel guides to mid-teens percent growth from the prior quarter, limited by supply.^34,36

Shows whether AI keeps lifting demand for Intel's server processors.

Next earnings report

Jan 28

In 84 days

Earnings calls page ↗

Expected earnings per share: $0.27
Expected revenue: $15.70B

What to listen for: Whether any outside customer is named for 14A, how steep the PC decline is, and how much Intel plans to spend on factories in 2027.^34,36,41

What would prove this wrong

✕No major outside customer beyond Tesla commits to 14A by mid-2027.
✕Foundry losses stay near $2B a quarter through 2027.
✕Intel sells more new shares to pay for factories.
✕PC chip revenue keeps falling through 2027 as PC demand stays weak.
✕AI spending slows and the server processor shortage turns into excess supply.
✕Delays to Intel's next server processors let AMD win more data center customers.

Our ratingSellLow convictionas of Nov 3 close, $60.55 · what ratings mean

Server chips are booming, but PC sales are shrinking and the factory bet is unproven, so expected 12-month gains still trail the S&P 500 even after the drop.

12-month target: $65.70 (+8.5%)
S&P 500, same method, with dividends: +18.5%
Expected vs the market: -10 points

The math behind the recommendation

Three 12-month price scenarios, weighted by probability, compared with the S&P 500 under the same method.

Now $60.55

Target $65.70

bull case20% likely

$94.04 +55%

Intel names 14A customers and the PC slump proves short, while server supply grows, so sales reach the top of analysts' range as foundry losses shrink.

$17.21 sales per share × 5.5 = $94.04

base case50% likely

$62.90 +4%

Server growth offsets falling PC sales and sales move toward the roughly $81B analysts expect for the 12 months starting a year out, while foundry orders arrive slowly.

$14.97 sales per share × 4.2 = $62.90

bear case30% likely

$51.47 -15%

The PC slump deepens, no major new 14A customer commits and Intel sells more shares to fund factories, leaving sales in the lower half of estimates.

$14.16 sales per share × 3.6 = $51.47

Why these odds: Intel has beaten estimates eight straight quarters and 2027 estimates rose over the past 90 days, but its fourth-quarter EPS forecast was 42% below consensus and analysts have not yet reset to it, so cuts are likelier than raises.

How the prices are built: Wall Street expects sales per share of $14.97 for the year starting a year from now (analysts range from $13.34 to $19.44). Today the stock trades at 4.8 times next year's sales per share; its five-year middle is 2.55.^{1,4,25,26,30,34,35,36,38,41,42,43,44}

What tests the call: Q4 2026 earnings: any named 14A customer, the PC decline and 2027 factory spending (Jan 28)

Buy means expected to beat the S&P 500 by 10+ points over 12 months; Sell means expected to trail it by 10+. Inputs gathered Oct 30; the recommendation updates with the price every day. Model-generated, not personalized investment advice. How ratings work · Track record

What the price assumes

At $60.55, Intel costs more than usual against its own sales

Intel trades at 4.8 times the sales analysts expect over the next 12 months. That ratio is the multiple: what investors pay today for each dollar of a year's sales. That is pricier than it has been 80% of the time over the past five years, when the middle was 2.5.

Analysts expect sales to grow about 18% the year after.

Intel multiple: 4.8×
Its usual multiple: 2.5×
Base case: +4%
Bear case: −15%

The skewOur bear case loses about $3.86 for every $1 our base case makes. That ratio, how much you stand to lose against how much you stand to make, is the skew.

Last earnings

Q3 2026 results, reported Oct 29

Intel beat on profit and server revenue, but forecast fourth-quarter sales and earnings far below expectations as PC demand fell.^{34,35,36,38,39,40}

Reported Oct 29	Expected	Actual	Difference
Earnings per share	$0.41	$0.52	+27.9%
Revenue	$16.56B	$16.51B	-0.3%

Stock reaction: Down 28.6% the next day, closing at $65.76 from $92.07, its worst day since 1974

Why the stock moved

Down: fourth-quarter forecast of $15B to $16B revenue and $0.25 EPS, against roughly $17B and $0.43 expected.
Down: PC chip revenue of $8.1B missed the roughly $8.8B expected, and PC units are seen falling through 2027.
Down: an Israel factory accident will cost about $300M of fourth-quarter revenue and 2 points of gross margin.
Down: Bank of America cut its rating to neutral, and Bernstein called the outlook "terrible" and cut its target.
Up, not enough: adjusted EPS of $0.52 beat $0.41, and data center revenue of $7.3B beat roughly $6.6B.

What it means for the stock: Weakened the near-term case. Servers are strong, but PC sales are shrinking faster than expected and Intel will not name 14A customers. Foundry loss narrowed to $1.85B.