Intel Corporation (INTC) Stock: Buy the Dip or Run for the Hills?

TLDR

Table of Contents

Intel stock dropped 1.56% to $18.93, underperforming the S&P 500’s 0.13% gain
New CEO Lip-Bu Tan replaced Pat Gelsinger in March after ongoing struggles
Intel’s foundry business posted a $13.4 billion operating loss in fiscal 2024
The company suspended its dividend after reporting a $19.2 billion net loss
Earnings report expected April 24, with forecast EPS of $0.01 (down 94.44% year-over-year)

Intel Corporation (INTC) shares continued their downward trend, closing at $18.93 in the latest trading session. This represents a 1.56% decline from the previous day’s close, lagging behind the S&P 500’s slight gain of 0.13%.

The semiconductor giant’s stock has plummeted 20.27% over the past month, significantly underperforming both the broader Computer and Technology sector’s 9.27% decline and the S&P 500’s 6.3% drop during the same period.

Intel’s struggles have led to major leadership changes. Former CEO Pat Gelsinger was ousted last year after failing to turn the company around. Lip-Bu Tan took over as chief executive in March 2025, inheriting a company facing serious challenges.

The chipmaker’s financial performance has been concerning. For fiscal year 2024, which ended December 28, Intel reported a 2% year-over-year drop in sales to $53.1 billion.

More troubling is the company’s foundry business, which is dragging down overall results. The manufacturing division saw sales fall to $17.5 billion in fiscal 2024 from $18.9 billion in fiscal 2023.

Mounting Losses in Manufacturing

Rising costs in the foundry segment, combined with declining revenue, resulted in an operating loss of $13.4 billion for fiscal 2024—nearly double the prior year’s loss of $7 billion.

This poor performance is particularly concerning because the foundry division was intended to be a key component of Intel’s long-term strategy. Under Gelsinger’s leadership, Intel had planned to compete with rival manufacturers like Taiwan Semiconductor Manufacturing (TSMC).

The financial strain has forced Intel to take drastic measures. In a blow to shareholders, the company suspended its dividend payments.

Overall, Intel reported a staggering net loss of $19.2 billion for fiscal 2024, a dramatic reversal from the $1.7 billion net income posted in fiscal 2023.

Bright Spots Amid Challenges

Not all segments are struggling, however. Intel’s client computing group, which includes PC products, generated $30.3 billion in revenue for fiscal 2024, up 3.5% from $29.3 billion the previous year.

In fact, all of Intel’s product divisions showed year-over-year revenue growth, collectively generating $48.9 billion in fiscal 2024 compared to $47.7 billion in the previous year.

Management now plans to focus on improving the foundry business and strengthening Intel’s AI offerings. This strategy makes sense given the growing importance of AI in the semiconductor sector.

The company expects to receive $8.5 billion in funding from the federal government to support U.S. manufacturing, which could help its turnaround efforts.

Intel has also secured some high-profile foundry customers, including Microsoft, as tech firms increasingly seek to build custom semiconductor chips designed for their specific business needs.

New CEO Tan has stated his goal is for Intel to “establish ourselves as a world-class foundry.” However, investors remain skeptical about whether he can successfully turn around the struggling manufacturing business.

Valuation and Future Outlook

From a valuation perspective, Intel stock’s price-to-book (P/B) ratio hovers around 0.8, a multi-year low. A value less than 1 indicates the stock is trading below book value, suggesting potential undervaluation.

Intel exited fiscal 2024 with total assets of $196.5 billion, compared to total liabilities of $91.5 billion. Its semiconductor manufacturing operations comprised more than half of its assets.

However, when comparing Intel’s return on equity (ROE) to competitors like Nvidia and TSMC, it becomes clear why Intel’s share price is so depressed. The company’s ROE has steadily declined over several years while competitors have prospered.

Investors are now looking ahead to Intel’s upcoming earnings report, scheduled for April 24, 2025. Analysts expect the company to report earnings per share of $0.01, representing a 94.44% decrease from the same quarter last year.

Revenue for the quarter is projected to be $12.32 billion, down 3.16% year-over-year.

For the full year 2025, analysts project earnings of $0.47 per share and revenue of $53.4 billion, representing year-over-year changes of +461.54% and +0.57%, respectively.

Intel currently has a Forward P/E ratio of 40.81, higher than its industry average of 23.74. Its PEG ratio stands at 2.4, also above the Semiconductor – General industry average of 1.65.

Analysts have recently revised their estimates downward, with the consensus EPS estimate moving 6% lower over the past 30 days. Intel currently carries a Zacks Rank of #4 (Sell).

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