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When Intel (INTC) says it plans to get back into building graphics processing units, or GPUs, it’s little wonder that investors perk up at the news. At a Cisco (CSCO) AI Summit this week, Intel CEO Lip-Bu Tan confirmed that Intel is putting together a new GPU initiative, led by its newly hired chief GPU architect Eric Demers, as well as its long-time executive in its data center group, Kevork Kechichian. The message was clear: Intel is trying to get back into the world of accelerated computing, a space dominated by Nvidia (NVDA) and AMD (AMD).
The markets quickly responded by sending Intel shares up by as much as 4% before settling, a positive read on the news that Intel’s AI story is expanding beyond its CPUs and its ongoing talk of its role in a future world of chip manufacturing, or a foundry model. While Intel is indeed trying to get back into the world of GPUs, it’s not its first try, and investors are likely aware that there can be a long way to travel from a company announcement to relevance, especially in a space as quickly evolving as AI.
About Intel Stock
Intel Corporation is a semiconductor company that designs, manufactures, and sells semiconductors used in client computing, servers, networking, and emerging AI accelerators, as well as a global foundry company. The company is based in Santa Clara, California, and has a market capitalization of about $243 billion, a reflection of its position as a traditional technology leader rather than a new entrant in a space like AI.
The company has had a remarkable run over the past year, going from a 52-week low of $18 a share to a recent high in the $50 range, a move that has left it just below its highs as it materially outperforms the S&P 500 ($SPX) over that same period.
The picture gets tricky with valuation. The company is currently unprofitable on a GAAP basis, with a forward price-earnings ratio that screens in very high due to low near-term earnings estimates. The stock also trades at 4.6 times sales and nearly 2 times book value, which assumes significant margin improvement over time.
Intel Beats on Earnings, but Guidance Remains Tight
Intel's fourth-quarter and fiscal year 2025 results provided a degree of cautious optimism. The fourth-quarter revenue came in at $13.7 billion, down 4% year-over-year (YoY), but non-GAAP EPS of $0.15 beat expectations. The revenue results were flat YoY at $52.9 billion.
The company's message on its earnings call was balanced. Tan elaborated on the company's progress on Intel 18A and increasing customer interest in future nodes but also cautioned on the call that supply constraints will impact the company's first-quarter 2026 results. The company guided first-quarter revenue of $11.7 billion to $12.7 billion with non-GAAP EPS around breakeven.
The GPU announcement is part of this overall reset. The company is not promising revenue from GPUs anytime soon but is instead signaling its long-term commitment.
The hiring of Demers, who has a history at Qualcomm (QCOM), is a positive, but other details are unknown.
What Do Analysts Predict About INTC Stock?
Wall Street analysts are divided on their expectations about the future of Intel stock. The consensus among analysts is mixed, with a “Hold” rating consensus, indicating that they believe the company's strategic reset is a good idea but are skeptical about how long it will take and how much return on investment they can expect.
The mean price target of $44.74 actually indicates a decline from the current stock price, suggesting that analysts believe the recent run has already priced in much of the optimism about the company's future. The bull case is based on three legs: execution of advanced process nodes (18A and 14A), third-party foundry customers, and upside potential from GPU sales if Intel can carve out a niche in data center acceleration. The bear case is much simpler: capital intensity is still high, margins are low, and Nvidia’s lead in AI software is not going away.
On the date of publication, Yiannis Zourmpanos did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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