By Al Root

Intel stock has been on a tear. Investors should consider buying it anyway.

Coming into Tuesday, Intel shares were on a nine-day winning streak, gaining 58% over that span and leaving shares up 220% over the past 12 months. Normally, Barron's would shy away from recommending it. Our job is to identify stocks before they take off, not tell our readers to buy after shares have more than tripled. For a stock that has been as risky as Intel -- its shares have been 1 1/2 times as volatile as the S&P 500 index over the past year -- getting it wrong will be painful.

Consider, however, where Intel is coming from. It's starting from a distressed base -- even after the recent gain, it lags behind the S&P 500 by 11 percentage points annualized over the past five years -- with no support from Wall Street amid management turmoil. Now, with new leadership, a vastly improved product road map, and a solid strategy, Intel has a path to joining the sector elite, whose ranks include Taiwan Semiconductor Manufacturing, Broadcom, and Nvidia. While the stock dropped 2.1%, to $63.81, on Tuesday, it could hit $150, up 140%, in the coming years.

"There is hair on the story," says Krishna Chintalapalli, portfolio manager of the Parnassus Value Equity and Value Select strategies. "If they get things right, the payoff is huge."

Intel, as investors are painfully aware, has watched helplessly as other tech companies racked up huge gains. Its stock peaked at $75.87 in August 2000 -- near the top of the dot-com boom -- and has never really come close since. While a pandemic boost for new laptops helped push shares as high as $69.29 in 2020, the stock hit a multiyear low in June 2025, below $18 a share and below book value. That 75% decline from its 2000 peak was the result of missing manufacturing transitions, such as the move to extreme ultraviolet semiconductor manufacturing, the shift to mobile computing, and the rise of graphic processing units, or GPUs, over central processing units, or CPUs.

Intel was simply left behind. In 2000, the company reported sales of about $34 billion and an operating profit of more than $10 billion. In 2025, sales were $53 billion and the company lost $2.2 billion, while Nvidia grew sales from $735 million to $215 billion, with operating profit climbing from $59 million to $137 billion. A string of five successive CEOs, including 80486 processor-designer Pat Gelsinger, couldn't fix the problem.

Enter Lip-Bu Tan, a venture capitalist and turnaround expert who was responsible for the revival of Cadence Design Systems, which gained more than 3,200% over his 12-year tenure.

Tan took the reins in March 2025 and has moved quickly. He cut a bloated workforce by more than 20,000 and dramatically cut cash burn . Intel's free cash flow was a cumulative negative $44 billion between 2022 and 2025 -- a $107 billion swing from the prior four years -- as investment spending shot higher. Free cash flow was positive in the second half of last year and should improve in the coming years as capital spending normalizes and revenue grows.

Now Tan is focused on improving Intel's manufacturing leadership and getting it back into the artificial-intelligence fight. Intel and Alphabet are working together on AI and cloud infrastructure, while Intel will help Elon Musk build and operate his "Terafab," an AI chip-making joint venture between SpaceX and Tesla. Intel is also developing chips designed to run AI agents on laptops and AI accelerators, similar to Alphabet's TPUs and Amazon.com's Tranium chips.

In September, Nvidia invested $5 billion in Intel, which will make custom x86 server CPUs to integrate with Nvidia products. Nvidia's GPUs are expensive, and Intel CPUs are a cost-effective way to support AI computing. "The demand for the x86 server CPU has gone through the roof at hyperscalers," says Melius Research analyst Ben Reitzes. "It's not gonna stop...the x86 became an AI chip."

Still, much of this good news is reflected in the stock. Shares now trade for 95 times expected earnings over the next 12 months, surpassing their previous peak of 60 times reached in 2021, and fetching more than Nvidia, Taiwan Semi, Broadcom, and Advanced Micro Devices.

On the surface, Intel is anything but cheap. Earnings, however, are depressed -- the company is expected to report 2026 earnings per share of roughly 50 cents in 2026, down from almost $5.50 in 2021 . Intel's gross profit margins in 2025 were below 40%, while Taiwan Semi's were 55% and Nvidia's were 75%.

There are reasons Intel's margins are low. It's paying its competitor Taiwan Semi to make an estimated 30% of its wafers as it builds its own fab capacity and invests in new products.

Intel's manufacturing yields -- the ratio of functional chips to the maximum possible -- in its newest chip-making process are too low. Taiwan Semi's yields are estimated to be as high as 90%, while Intel's are estimated at about 70%. Improving yields isn't a given, but as that process matures, there should be a new stream of earnings and free cash flow.

"Lip-Bu is great," says Molly Pieroni, president of Yacktman Asset Management. "If anybody can pull this off, he can."

Wall Street isn't a believer. Earnings estimates for 2026 and 2027 have barely budged, and only about a fifth of analysts covering it have a Buy rating on the shares, well below the 55% for the average stock in the S&P 500. But analysts are starting to come around. Reitzes, for one, upgraded shares to Buy in January with a $75 price target, up 19% from recent levels, and others could follow. "If agentic AI and the importance of the semiconductor domestic supply chain are just in the early innings, the stock will grow in and grow into and surpass its valuation," says Reitzes.

But even Reitzes' target undersells what is possible. With a better product lineup and normal profit margins, Intel could easily earn $7 a share by 2029. At a typical semiconductor multiple of 22 times forward earnings, that would support a $150 price for Intel stock in a couple of years. Meanwhile, investors can look forward to rising earnings estimates and improving Wall Street sentiment. And even after Intel's recent run, the company is worth just $320 billion, less than AMD's $415 billion, despite 50% more sales. Nvidia, Taiwan Semi, and Broadcom are worth trillions. It certainly doesn't hurt that Intel is the only U.S. chip maker -- arguably an essential attribute due to security concerns.

For investors reluctant to go all in now, there's always dollar-cost averaging -- buying a little now and adding additional stakes in the weeks ahead. That way, if the stock keeps rising, at least they own some; if it drops, they can buy on the dip.

Just don't miss it completely. The bet is that Intel can regain its place at the semiconductor table -- and the stock still has plenty of room to run.

   -- Stay tuned for the next live Q&A! Watch the Barron's Investor Circle page 
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This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

By Al Root

Intel stock has been on a tear. Investors should consider buying it anyway.

Coming into Tuesday, Intel shares were on a nine-day winning streak, gaining 58% over that span and leaving shares up 220% over the past 12 months. Normally, Barron's would shy away from recommending it. Our job is to identify stocks before they take off, not tell our readers to buy after shares have more than tripled. For a stock that has been as risky as Intel -- its shares have been 1 1/2 times as volatile as the S&P 500 index over the past year -- getting it wrong will be painful.

Consider, however, where Intel is coming from. It's starting from a distressed base -- even after the recent gain, it lags behind the S&P 500 by 11 percentage points annualized over the past five years -- with no support from Wall Street amid management turmoil. Now, with new leadership, a vastly improved product road map, and a solid strategy, Intel has a path to joining the sector elite, whose ranks include Taiwan Semiconductor Manufacturing, Broadcom, and Nvidia. While the stock dropped 2.1%, to $63.81, on Tuesday, it could hit $150, up 140%, in the coming years.

"There is hair on the story," says Krishna Chintalapalli, portfolio manager of the Parnassus Value Equity and Value Select strategies. "If they get things right, the payoff is huge."

Intel, as investors are painfully aware, has watched helplessly as other tech companies racked up huge gains. Its stock peaked at $75.87 in August 2000 -- near the top of the dot-com boom -- and has never really come close since. While a pandemic boost for new laptops helped push shares as high as $69.29 in 2020, the stock hit a multiyear low in June 2025, below $18 a share and below book value. That 75% decline from its 2000 peak was the result of missing manufacturing transitions, such as the move to extreme ultraviolet semiconductor manufacturing, the shift to mobile computing, and the rise of graphic processing units, or GPUs, over central processing units, or CPUs.

Intel was simply left behind. In 2000, the company reported sales of about $34 billion and an operating profit of more than $10 billion. In 2025, sales were $53 billion and the company lost $2.2 billion, while Nvidia grew sales from $735 million to $215 billion, with operating profit climbing from $59 million to $137 billion. A string of five successive CEOs, including 80486 processor-designer Pat Gelsinger, couldn't fix the problem.

Enter Lip-Bu Tan, a venture capitalist and turnaround expert who was responsible for the revival of Cadence Design Systems, which gained more than 3,200% over his 12-year tenure.

Tan took the reins in March 2025 and has moved quickly. He cut a bloated workforce by more than 20,000 and dramatically cut cash burn . Intel's free cash flow was a cumulative negative $44 billion between 2022 and 2025 -- a $107 billion swing from the prior four years -- as investment spending shot higher. Free cash flow was positive in the second half of last year and should improve in the coming years as capital spending normalizes and revenue grows.

Now Tan is focused on improving Intel's manufacturing leadership and getting it back into the artificial-intelligence fight. Intel and Alphabet are working together on AI and cloud infrastructure, while Intel will help Elon Musk build and operate his "Terafab," an AI chip-making joint venture between SpaceX and Tesla. Intel is also developing chips designed to run AI agents on laptops and AI accelerators, similar to Alphabet's TPUs and Amazon.com's Tranium chips.

In September, Nvidia invested $5 billion in Intel, which will make custom x86 server CPUs to integrate with Nvidia products. Nvidia's GPUs are expensive, and Intel CPUs are a cost-effective way to support AI computing. "The demand for the x86 server CPU has gone through the roof at hyperscalers," says Melius Research analyst Ben Reitzes. "It's not gonna stop...the x86 became an AI chip."

Still, much of this good news is reflected in the stock. Shares now trade for 95 times expected earnings over the next 12 months, surpassing their previous peak of 60 times reached in 2021, and fetching more than Nvidia, Taiwan Semi, Broadcom, and Advanced Micro Devices.

On the surface, Intel is anything but cheap. Earnings, however, are depressed -- the company is expected to report 2026 earnings per share of roughly 50 cents in 2026, down from almost $5.50 in 2021 . Intel's gross profit margins in 2025 were below 40%, while Taiwan Semi's were 55% and Nvidia's were 75%.

There are reasons Intel's margins are low. It's paying its competitor Taiwan Semi to make an estimated 30% of its wafers as it builds its own fab capacity and invests in new products.

Intel's manufacturing yields -- the ratio of functional chips to the maximum possible -- in its newest chip-making process are too low. Taiwan Semi's yields are estimated to be as high as 90%, while Intel's are estimated at about 70%. Improving yields isn't a given, but as that process matures, there should be a new stream of earnings and free cash flow.

"Lip-Bu is great," says Molly Pieroni, president of Yacktman Asset Management. "If anybody can pull this off, he can."

Wall Street isn't a believer. Earnings estimates for 2026 and 2027 have barely budged, and only about a fifth of analysts covering it have a Buy rating on the shares, well below the 55% for the average stock in the S&P 500. But analysts are starting to come around. Reitzes, for one, upgraded shares to Buy in January with a $75 price target, up 19% from recent levels, and others could follow. "If agentic AI and the importance of the semiconductor domestic supply chain are just in the early innings, the stock will grow in and grow into and surpass its valuation," says Reitzes.

But even Reitzes' target undersells what is possible. With a better product lineup and normal profit margins, Intel could easily earn $7 a share by 2029. At a typical semiconductor multiple of 22 times forward earnings, that would support a $150 price for Intel stock in a couple of years. Meanwhile, investors can look forward to rising earnings estimates and improving Wall Street sentiment. And even after Intel's recent run, the company is worth just $320 billion, less than AMD's $415 billion, despite 50% more sales. Nvidia, Taiwan Semi, and Broadcom are worth trillions. It certainly doesn't hurt that Intel is the only U.S. chip maker -- arguably an essential attribute due to security concerns.

For investors reluctant to go all in now, there's always dollar-cost averaging -- buying a little now and adding additional stakes in the weeks ahead. That way, if the stock keeps rising, at least they own some; if it drops, they can buy on the dip.

Just don't miss it completely. The bet is that Intel can regain its place at the semiconductor table -- and the stock still has plenty of room to run.

   -- Stay tuned for the next live Q&A! Watch the Barron's Investor Circle page 
      for the sign-up link 
 
   -- Share your questions and thoughts in the "Conversation" section below to 
      engage directly with the author and our community 
 
   -- Receive alerts about more content from this author by clicking "Follow" 
      next to the author byline at top 

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

April 15, 2026 07:11 ET (11:11 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.