After months of turbulence, Intel Corp. bulls are finally being rewarded for their patience. But the stock’s sudden rebound comes with a worrying side-effect: a valuation so high its most recent precedent is from the dot-com era more than two decades ago.

Shares of the struggling chipmaker have rallied 28% this month, adding about $24 billion in market value, on reports that the US government is in talks for a potential equity stake, as well as plans for a $2 billion investment from Japan’s SoftBank Group Corp. The jump has Intel trading at 53 times profits projected over the next 12 months, the highest since early 2002, according to data compiled by Bloomberg.

“The stock looks incredibly expensive here,” said Wayne Kaufman, chief market analyst at Phoenix Financial Services. “That kind of multiple is a bet that the government will push Intel so hard on customers that it becomes a winner.”

The surge in Intel this month followed a slump in the wake of a disappointing earnings report on July 24 and criticism of Tan earlier by President Donald Trump, who called for the CEO to step down, citing conflicts of interest. After meeting with Tan on Aug. 11, Trump changed his tune, saying Tan’s “success and rise is an amazing story.”

Since then, reports have circulated that the Trump administration is in discussions to take a stake of about 10% in the company. Commerce Secretary Howard Lutnick said in a CNBC interview on Tuesday that the talks are aimed at converting US grants already made to Intel under the Chips and Science Act into non-voting equity.

Of course, the US’s plans regarding Intel haven’t been finalized and could still change. Intel declined to comment on Lutnick’s remarks.

For Paul Nolte, market strategist and senior wealth manager at Murphy & Sylvest Wealth Management, the potential government involvement could benefit Intel in the short-term but may pose a risk in the long term.

“This strikes me as an easy road to get onto, but a hard one to get out of,” Nolte said. “At the end of the day, this raises so many more questions than it answers.”

Meanwhile, Intel’s premium valuation is largely a reflection of just how much its profitability has collapsed in recent years.

Intel is projected to generate more than $1 billion in adjusted profit over the next four quarters, after losing about $1.3 billion in the previous four, according to data compiled by Bloomberg. From 2018 to 2021 the company generated more than $20 billion in annual profits on average.

“We have no idea what Intel can deliver in earnings growth since it is so behind on tech and because you can’t cost-cut your way to growth,” said Nancy Tengler, chief executive officer of Laffer Tengler Investments. “It’s hard to have confidence in the estimates, which makes it difficult to assess the valuation. I think it’s overvalued, but I also think the picture is so uncertain that it wouldn’t be attractive at any price.”

Wall Street largely echoes her caution. Fewer than 8% of the analysts tracked by Bloomberg recommend buying the stock, while nearly 80% have the equivalent of a neutral rating. In addition, at its Tuesday close of $25.31, Intel trades notably above the average price target of about $22, representing the weakest return potential among components of the Nasdaq 100 Index.

Still, there is optimism that Chief Executive Officer Lip-Bu Tan will be able to turn things around. Much of his focus has been on cost cutting, which has improved Intel’s outlook to return to profitability but raised concerns the chipmaker may be bowing out of the race for technological leadership. Part of his effort has also been centered on a costly build out of its foundry operations undertaken by his predecessor, Pat Gelsinger.

“Clearly it’s going to take a number of years for it to really start operating on a smooth basis,” said Gerrit Smit, lead portfolio manager of the Stonehage Fleming Global Best Ideas Equity fund. “We’ve got trust in him, but we think he’s got a long slog ahead.”