Intel's Comeback Has Been Stellar. The Risk-Reward No Longer Is.
The US chipmaker’s been boosted by government backing, big-name investors, and AI enthusiasm. But with its shares at record highs and sky-high valuations, it might be time to take some chips off the table.
The backstory
Cast your mind back to August 2024. Intel dropped a truly awful second-quarter update, and its stock got hammered – down 26% in a single day, its worst fall in fifty years. The shares sank to a decade low and, for the first time in over 30 years, fell below book value.
At the time, the doom and gloom felt overdone. A sum-of-the-parts valuation backed that up: even with conservative assumptions, Intel’s fair value looked meaningfully higher than where it was trading. The thesis was simple – Intel was taking the right steps to turn things around, and the US government wasn’t going to let its most strategically important chipmaker go under.
And that logic made sense. The US needs a homegrown chip manufacturer. Fabless companies — the ones that design chips but outsource the actual building — need a credible alternative to TSMC. Betting everything on a single supplier based in Taiwan, a region prone to earthquakes and geopolitical friction, isn’t exactly a low-risk strategy. And if the US wants to stay on top in AI, it needs advanced chips being made on American soil.
Then the cavalry showed up
Over the past year and a half, the support that was once just a thesis became very real.
In August 2025, the US government took a near-10% stake in Intel, receiving roughly 433 million new shares in exchange for $8.9 billion in CHIPS Act and Secure Enclave funding. That was a major vote of confidence — the kind that doesn’t get reversed easily.
That same month, SoftBank bought a roughly 2% stake for $2 billion in newly issued shares, giving Intel both a cash boost and a stamp of approval from one of the world’s biggest tech investors. A few weeks later, Nvidia joined the party with a $5 billion investment, sending shares up 23% in a day. But Nvidia wasn’t just writing a check — the two rivals agreed to jointly develop chips for PCs and data centers, a partnership that some analysts think could generate $50 billion in annual revenue for the pair.
Then in April 2026, Intel used its improved financial position to buy back a 49% stake in its Irish Fab 34 plant from Apollo for $14.2 billion — reversing a cash-raising deal from tougher times and signaling real confidence in AI-driven demand going forward.
More wins followed quickly. Google agreed to use future generations of Intel’s Xeon processors for its data centers. And Elon Musk gave Intel another push, announcing that Tesla and SpaceX plan to use its next-gen 14A chipmaking process for the ambitious “Terafab” project — a potential manufacturing facility so large it could dwarf the entire current global output of the chip industry.
Then came the earnings blowout
Last Thursday (April 23), Intel delivered the clearest proof yet that its turnaround is working. The stock jumped 24% on Friday — its best single-day performance since 1987.
Revenue came in at $13.58 billion, beating analyst expectations of $12.4 billion by about 9%. Earnings hit $0.29 per share, absolutely crushing a consensus forecast of just $0.02. The Data Center and AI segment grew 22% year-over-year to over $5 billion, and CFO David Zinsner noted that AI-driven businesses now make up 60% of Intel’s revenue and grew 40% from a year ago.
The guidance was just as impressive. Intel sees Q2 revenue between $13.8 billion and $14.8 billion, well ahead of the $13 billion analysts had penciled in. CEO Lip-Bu Tan, marking his one-year anniversary at the helm, said plainly: this is a fundamentally different company today.
The stock is now trading near $85, up roughly 90% in April alone and around 120% year-to-date. Intel’s market cap has crossed $414 billion — a level it hasn’t seen in about 25 years.
So why close the position?
After all that good news, it might seem strange to step away. But here’s the thing: good companies and good investments aren’t always the same thing. Valuation matters.
Intel’s forward P/E ratio now sits somewhere around 74–149x expected earnings, depending on whose estimates you use. That’s the highest multiple in its history — well above even its dot-com-era peak of around 55x. In other words, an enormous amount of optimism is already baked into the price.
The original investment was made back in October 2024 at $22.70 a share. After trimming half the position in October 2025 (when the stock had already gained 64%), the total return works out to about 164%. That’s a strong result, and a lot of it came from disciplined position management — banking gains along the way rather than trying to time the absolute peak.
Trimming winners is one of the most underrated parts of investing. It lets you lock in real returns without walking away entirely, prevents any single position from ballooning too large in your portfolio, and smooths out the emotional ride. You don’t need to nail the top — you just need a process that works over time.
