Intel's Turnaround Story Still Faces Major Execution Risks

This article first appeared on GuruFocus.

Intel (NASDAQ:INTC) has been a comeback story in waiting. After years of stumbles in chip manufacturing and share losses to rivals, investors are watching for signs that 2025 could finally mark a turnaround.

The company's 18A process, its most advanced chip node, could be a game changer if production ramps up smoothly and external customers sign on. Success here could reassert Intel's position in the foundry race, bringing much-needed credibility and fresh revenue streams.

Warning! GuruFocus has detected 9 Warning Signs with INTC. Is INTC fairly valued? Test your thesis with our free DCF calculator.

The push into AI is another potential spark. Intel's Gaudi 3 chips are gaining interest from big names like IBM and Dell, and new AI PC processors under the Panther Lake line could give it a foothold in both cloud and consumer markets. If adoption grows, it might finally help Intel close some of the gap with Nvidia and AMD.

The near-term setup isn't spotless. Revenue was roughly flat year-over-year; Intel reported Q3 2025 revenue up about 3% versus the prior year, with margins still under pressure and free cash flow turning negative. Shares trade at a steep valuation relative to recent earnings, a reminder that expectations may be running ahead of fundamentals.

High PC refresh cycle and increased demand on data-center chips would increase revenue in 2025; however, it will depend on the capability of Intel. Any sentiment shift tends to generate big gains or sharp declines at Intel. The upside potential would be large if it wants to succeed with the 18A rollout, and win critical AI contracts. Otherwise the stock could not continue its recent upward trend.

Is INTC Stock a Buy?Intel's Turnaround Story Still Faces Major Execution Risks

Based on the one year price targets offered by 36 analysts, the average target price for Intel Corp is $35.04 with a high estimate of $50.00 and a low estimate of $18.00. The average target implies a downside of -8.71% from the current price of $38.38.

Based on GuruFocus estimates, the estimated GF Value for Intel Corp in one year is $23.64, suggesting a downside of -38.41% from the current price of $38.38. gf value is gurufocus estimate of the fair value that the stock should be traded at. it is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. For deeper insights, visit the forecast page.

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