Is Intel a Buy Right Now? Here's What You Need to Know
In a Nutshell
Intel stock has surged sixfold from $20 to $125 on US government stakes, Trump-era partnerships, and a new Apple chip deal, fueling short-term momentum amid AI hype, but fundamentals remain weak with $3B annual losses on $53B revenue and a negative 197x P/E. Turnaround projections show $5.6B net income by 2026 (112x P/E at current $627B market cap), betting on US manufacturing edge, though chip sector norms are 25-35x and history warns of volatility like Palantir's 32% drop. Buy the story cautiously with 10-20% position sizing, no leverage, and strict risk-reward favoring upside over downside at elevated levels.
These notes were generated by AI and may contain inaccuracies.
Address the elephant in the room: Is Intel a good investment or should you stay away? Can you buy Intel and make money in the short term? Yes, due to market direction and market sentiment. Fundamentally, where is Intel at?
Trump administration took a 10% stake in Intel at around $20 per share; now up to $125 per share, up six times in under a year. On Friday, announced additional partnership pushing Intel higher: Apple and Intel reached a preliminary chip deal. Trump's idea: Partner with Intel to bring manufacturing back to the United States. May not be cheaper for companies like Apple, but possibly fewer restrictions and regulations, giving Intel a competitive edge.
Not saying Intel is a good deal. Do you buy the story of Intel?
Intel is no stranger to volatility. On monthly timeframe back to 2000 or 1990: pumping to dumping repeatedly. Recently, post-pandemic rally to highs of $62, dumping to lows of $20. Patterns tend to repeat, though not always. Never had a partnership like this with the US government.
Can this turn Intel around?
Using Investing Pro (first link in description): Intel's revenue recently not good or attractive. Loses $3 billion a year on $53 billion revenue. Negative 197x P/E ratio. Failing business, or once was.
Underdog story: Can it go from red to robust? Asked Warren AI: With new partnerships and excitement, fundamentally, what's Intel's net income expected by end of 2026? Expected to hit $5.6 billion, a dramatic shift from recent losses, putting it back in the black.
If it follows through, consider the turnaround story. Will promises and partnerships actually happen?
Current market cap: $627 billion. With $5.6 billion net income, P/E ratio would be 112x (or around $24.92 per share calculation).
Is 112x cheap? No. In chip sector, 25-35x; Nvidia at 40x multiple as world leader.
You're buying the story, the dream. If you believe in it, invest. Outlook for 2026: If AI revolution grows without correction or bubble burst, Intel gains market share via US manufacturing and partnerships with Magnificent 7 companies, 112x isn't insane but high—needs to follow through.
Markets can stay irrational longer than you can stay solvent. If people like the story and see changes, great—until disappointment, then market is relentless.
Recent companies: HIMS had sharp rallies and strong corrections. Palantir (likely 'Palunteer') looked unstoppable, rough 2026 from highs of $207 to lows of $136 (down 32% while markets at all-time highs). Imagine buying at highs; if markets drop, could go below $100 (down 50%). Best performing stock last year, now doing terrible. Stories repeat.
Semiconductors, CPUs, GPUs big story of 2026 due to AI—that's current sentiment and excitement. Be careful when sentiment shifts.
Never be scared to invest in what you believe in. Understand best and worst case: more upside possible, but worth overleveraging? Position size management key for beginners.
Example: With $10,000 account, don't go all in. Use 10-20%, have skin in the game. Profit if up, not devastated if down. Avoid leverage during speculative times.
Markets irrational: All-time highs despite rising inflation, weak labor market, struggling Americans, rising oil. Specific sector propping up markets; overvalued correct hardest on uncertainties.
Pay attention, set alerts. Go long if you want, but manage position size, no leverage.
Plan trades: Risk-to-reward—profit potential vs. loss potential. Favorable if profit outweighs loss significantly; odds in your favor. Avoid where risk > reward—can be green short-term, but turnaround hurts.
Doesn't make sense to be aggressive at elevated levels. Risk calculator for LPP users (second link in description).
Shared bull and bear case. Excitement in semiconductors, momentum favorable, but don't be super aggressive at elevated levels. Take opportunities without going all in.
Appreciate time; thumbs up, subscribe, comment video ideas. End year green.
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