Intel Stock Analysis - Buy INTC Today?

Hi, I'm Jimmy. In this video, we're looking at Intel, ticker symbol INTC. So, we're going to look quickly at Intel's business, then at some key events that have moved this stock over the past couple of years, then we're going to take a peek at some of the numbers, finally try to come up with a fair value to for Intel's stock to see if it's worth investing in today. So, Intel's in one of the most interesting positions in all of tech as of this moment. So, this company's trying to do something that very few companies have been able to successfully pull off. It's trying to fix its product, factories, it's trying to rebuild investor trust, it's trying to win outside customers, and they're trying to do all of this while the entire industry is racing after artificial intelligence. So, Intel's really two different businesses. One business designs and sells chips for PCs and servers, and the other business runs factories that make those chips, and they hope to make those chips for other companies as well. So, a good way to think about this is that Intel is trying to In the chip industry, most companies are specialists. Some companies design their own chips, some companies build the chips. Intel's one of the few companies that are trying to do both, and they're trying to do both at a high level. When it works, that's a huge advantage. For a long time, this was a massive advantage for Intel. But, when either one don't work, the whole thing falls apart. Intel's problems built up over years. The short version is that manufacturing got much harder, and Intel lost some of the edge that it previously had on its competitors, and then those competitors that they had got stronger, and Intel went from being ultimately that point the undisputed leader in the chip industry to a company that was missing the AI boom. A huge part of that story was factory execution. By 2020, Intel was publicly dealing with yet another major delay in their advancing down the manufacturing roadmap, and that was happening while Taiwan Semiconductor help helped competitors like AMD or Nvidia push out their next generation of chips. In the meantime, Intel was trying to manufacture their own chips, and their chips just were not as good as their competitors were. So, their edge slowly began to slip as the years went on. Then, AI changed the economics of the entire industry. In fact, in its 2025 annual report in Intel's 2025 annual report, they said that a lot of their demand growth was driven by AI, but it also admitted that customers were often prioritizing GPUs, graphics processing units, versus the CPUs, which is really, frankly, Intel's specialty. Intel has long been the CPU leader, but that's kind of a brutal thing to deal with. The entire industry shifted from CPUs being the most important component of what computers were doing to GPUs and other accelerators to being far more important, and that brought the whole industry away from Intel's specialty. So, Intel got hit from both sides. The factory side lost its old It used to have an lead on the rest of the competitors, it gave that up, and on the product side, well, they're trying to defend their core CPU product. Intel dominated there for years, but in the meantime, customers were largely going with some of their competitors who focused on things like GPUs. So, while companies like Nvidia and AMD saw revenue growth, just a quick example, I did a video on Nvidia the other day. This is a chart of Nvidia's revenue, and as you can see, it went a bit nuts. Roll that over to a chart of Intel. This is a chart of Intel's revenue, and we can see the story's not nearly the same. And the key thing for us to realize here is that this drop-off in revenue largely happened to because Intel's products failed to keep up with it. Now, when I first started looking at Intel, I was actually fairly interested in Intel, bought a piece of it for a while, ended up selling out a bit later, so I don't own any shares now, but when I first got into it, one of the things that interested me about Intel was that kind of two-pronged approach where they both manufacture their own chips and they design sold their own products. They kind of attacked the entire industry, and for a long time they were the leaders. But, one of the from a numbers perspective, one of the interesting things about it is look at their gross profit margins. Gross profit margins is after they manufacture their product, how much is remaining? Well, leading into, let's call it the AI boom, they were they had fantastic gross profit margins, right? Up above 50%, and look at what those numbers have done since then. It has gotten really bad. When we switch over to net income, well, it's gotten even worse with net income because the company Okay, fine, there are some one-off items in there as well, but still, they went from being fairly profitable to not being profitable at

all. Now, I would remind us that yes, this company did put up over $50 in revenue last year. So, I'm not talking about them necessarily going out of business straight away, but they have a real problem on their hands. Interestingly though, let's jump over real quick and look at a chart of Intel. Well, this is a chart of Intel's stock over the past year. And if we're curious, this stock has actually outperformed both AMD and Nvidia over the past year. But, just focusing on Intel's chart for a second, let's look at the past year and see how this actually happened. So, in September of 2025, Nvidia actually announced a $5 collaboration with Intel where they were going to use Intel foundries to build some of their chips. Don't forget Nvidia doesn't build their own chips. Taiwan Semiconductor builds most of their chips. So, this was kind of a stamp of approval, and the stock popped because of it. Now, this is shortly after I think it was August of 2025 when the government the US government officially took a stake in Intel from a lot of the money that they gave them in the Chips Act and stuff like that. So, the US government takes a stake, Nvidia essentially gives them the stamp of approval, so that's a good thing, and the stock starts running up. Now, at that time, there was actually a lot of short interest in this stock. So, once Nvidia announced it and the stock started running up, a lot of those shorts got squeezed, and that pushed even They would push the stock even higher. Then, going into 2026, well, in early 2026, Intel released some of the numbers. They showed off some of their new 18A chips, 18A node chips, and essentially those chips did quite well. They performed quite well compared to some of AMD's chips. So, that actually continued let's say the run-up in the stock price because everybody was looking forward They were saying that they were when they pre-announced earnings, Intel came out and said they thought that their 18A chips were going to be profitable far ahead of schedule. So, again, the stock continued to march higher. Now, as of the recording of this video, just a couple days ago, and Intel announced that they had signed up a major hyperscaler, something like AWS and Microsoft, a company like that. They had announced that they were going to do It was going to be It was big for them. Again, kind of another verification, kind of like what they had with Nvidia, and the stock jumped even higher. Today, it's above $60 per share as of the recording of this video. So, a lot has gone Intel's way, but as you can see, the stock is largely already reacted, and there although their manufacturing is certainly on pace, we will see whether or not they can actually gain real traction compared to companies like some of their competitors like Nvidia or AMD. Well, when we jump over and look at the fair value. First, we can't really use historical PE because over the past 12 months, they weren't profitable, so that number's useless. When we look at the forward PE, the number's outrageous. Right now, it's showing up at about 100X, and again, that's because analysts are expecting for earnings per share to be fairly small over the next 12 months. So, if that's the case, again, forward PE is virtually unusable. For that, we got to stick with discounted free cash flow, and we're going to use analyst estimates to see what the real fair value could be. So, when we switch over and look at our fair value calculator, well, we're going to max out the number of analysts that we have, and we have five years of analyst estimates. We can see that analysts expect for this fiscal year to be negative. Kind of logical given the situation that they're in. Well, next year goes slightly positive, and then ramping up to three years after that, it starts to gain a bit of momentum. But, with these estimates, it has the fair value in the mid-30s. Right now, the stock's trading above $60 per share. So, although Intel's a very interesting story, and the stock has done extraordinarily well, I think this stock is almost gone too far. Now, I sadly sold out of their stock a bit too early. I didn't get this giant run-up in the stock. I would kind of wish I had. But, I do question, although I do think interesting Intel's a interesting and fascinating company to be watching, at this price, it just seems a bit overvalued. Now, if you want to sign up to get access to the Investors Grow website where we try to make it quick and easy to analyze companies, I'll leave a link right here, a link in the description below. And thank you so much for sticking with me all the way to the end of the video. I really do appreciate it. Thank you, and I'll see you in the next video.