Intel Could Score Major Packaging Customers. Should You Buy INTC Stock Now?

Intel (INTC) has been derided for squandering its leadership position in the chip race while also not leveraging its capabilities fully as a full-stack provider of everything semiconductors. No wonder it is languishing behind peers like Nvidia (NVDA), AMD (AMD), and Broadcom (AVGO).

However, under the leadership of industry veteran Lip-Bu Tan, Intel is finally looking to regain its mojo. While the 18A chip and the strategic move to separate the design and foundry businesses can be long-term triggers if played out correctly, the company's packaging business is also gaining traction.

With partners like Microsoft (MSFT) and Cisco (CSCO) already on board, media reports have emerged that Amazon (AMZN) and Google (GOOGL) (GOOG) are also mulling onboarding Intel as one of their advanced packaging partners. INTC stock went up marginally on the news, but it is already up 41% on a year-to-date (YTD) basis.

Thus, can this provide another leg up for INTC stock this year? Let's find out.

Advanced Packaging: Ace up the Sleeve

The advanced chip packaging market is a growing and lucrative one, with forecasts of the same reaching $55 billion by 2030. Although TSMC (TSM) is the undisputed leader with a market share of more than 60%, Intel is slowly but surely carving out its place in this space.

Currently, Intel captures just a high single-digit share of the outsourced advanced packaging market, though this figure is expanding rapidly. The massive total addressable market allows the company to secure billions in new revenue simply by acting as a secondary supplier for tech giants trying to avoid Asian supply chain bottlenecks.

What works in favor of Intel is that the company possesses a unique structural advantage by operating as an integrated systems foundry right on American soil. Competitors like Amkor (AMKR) and ASE excel at outsourced assembly but cannot manufacture the underlying silicon wafers. Then, compared to TSMC and Samsung, Intel differentiates itself through geographic security and specialized interconnect technologies. 

Notably, the company invested heavily in New Mexico to offer massive floor space dedicated to its embedded multi-die interconnect bridge technology. This provides a cost-effective alternative to the standard methods used by rivals. Operating domestic facilities also allows the company to easily win lucrative defense contracts that strictly require secure North American supply chains, a hurdle its Asian competitors simply cannot clear.

Finally, to capture more market share, Intel is aggressively rolling out its next-generation three-dimensional stacking technologies known as Foveros Omni and Foveros Direct. These advanced offerings enable direct copper-to-copper bonding, which drastically reduces power consumption while multiplying bandwidth between individual chiplets. The company is also pioneering the industry transition toward glass substrates, representing a massive material science upgrade over traditional organic bases that permits significantly larger chip packages. By expanding massive facilities in Malaysia and scaling its hybrid bonding techniques to achieve sub-ten-micron bump pitches, the company is equipping cloud hyperscalers with the necessary engineering tools required to build custom AI accelerators that can genuinely rival traditional monolithic processors.

Financials Not up There but Stabilizing

Intel has faced significant challenges over the past decade, recording negative compound annual growth rates of -0.46% for revenue and -45.59% for earnings. While INTC stock has risen approximately 61% during this period, the majority of that appreciation occurred after the U.S. government acquired roughly a 10% stake in the company.

There are modest signs of stabilization in the financial performance. Over the past nine quarters, Intel has beaten consensus earnings estimates on six occasions. The most recent quarter also delivered beats on both revenue and earnings.

Revenue declined 4% year-over-year (YoY) to $13.7 billion. The client computing segment, which remains the largest, fell 7% to $8.2 billion. However, this segment could see improvement in the coming quarters with the launch of the company’s first AI PC platform built on the Intel 18A process, the Intel Core Ultra Series 3. Revenue from the data center and AI segment grew 9% to $4.7 billion, while the Foundry business increased 4% to $4.5 billion.

Earnings per share rose 15% to $0.15, exceeding the $0.08 consensus estimate. This marked the second consecutive quarter of beating earnings expectations.

Cash flow from operations for 2025 totaled $9.7 billion, up from $8.3 billion in the prior year. The company ended the quarter with $14.3 billion in cash and equivalents, comfortably exceeding its short-term debt of $2.5 billion.

Valuation metrics are mixed. The forward P/E ratio of 104.21 is well above the sector median of 21.63, but the forward P/S of 4.70 and forward P/CF of 17.72 appear more reasonable relative to sector medians of 2.97 and 16.50, respectively.

Analyst Opinion on INTC Stock

Considering all, analysts still rate INTC stock a consensus “Hold.” The mean target price has already been surpassed, whereas the high target price of $66 denotes an upside potential of about 30% from current levels. Out of 45 analysts covering the stock, five have a “Strong Buy” rating, one has a “Moderate Buy” rating, 34 have a “Hold” rating, one has a “Moderate Sell” rating, and four have a “Strong Sell” rating.