Intel (INTC): The Turnaround That’s Been “Turning Around” for Five Years

For: Contrarian / speculative investors
Horizon: 3–5 years — this is a bet, not a hold

Intel is up about 70-75% in 2025. The stock has roughly doubled off its lows. Wall Street is calling it a comeback story.

I’ve been watching this one for a while. The question: is the turnaround real, or am I just paying for hope?

Core Thesis

Thesis: Intel is a turnaround story that still hasn’t turned. The stock is priced for hope, not execution—and the foundry math doesn’t work yet.

Business & Fundamentals

Intel used to be simple: the company that made the chips inside your PC. That business is still there, but it’s shrinking relative to the competition, and management is betting the entire company on something much harder.

Today, Intel is three businesses in a trench coat:

Intel Products Group (~$12.7B/quarter): The legacy CPU business. PCs, laptops, data center processors. This is what actually makes money. Client Computing (CCG) did $8.5B in Q3 2025, up 8% sequentially. Data Center (DCAI) did $4.1B, down 1% YoY. The PC refresh cycle and Windows 11 are helping, but AMD keeps taking server share. Intel’s x86 server market share has fallen from 94% in 2020 to ~73% in 2025.

Intel Foundry (~$4.2B/quarter): The moonshot. Intel wants to become TSMC—manufacturing chips for other companies, not just itself. This is where the $100B+ in capital investment is going. It’s also where the losses are piling up: $2.3B operating loss in Q3 2025, $3.17B loss in Q2. The foundry has almost no external customers—the vast majority of that $4.2B in revenue is Intel making chips for itself.

Other (Mobileye, Altera remnants): Distractions being sold off or spun out.

Q3 2025 Numbers:

Metric Q3 2025 Revenue $13.7B (+6% seq) Non-GAAP EPS $0.23 Non-GAAP Gross Margin 40% Operating Cash Flow $2.5B Free Cash Flow $900M Cash Position $30.9B

The catch: That $4.1B net income is flattered by one-offs—roughly $3B from asset sales (Altera + Mobileye stake). Operationally, Intel only earned about $1B.

3-5 Year Trend:

• Revenue has been flat to declining. 2021-2024 saw consistent YoY drops as AMD took share and PC demand normalized post-COVID.
• Gross margins compressed from mid-50s% to low-40s% as older nodes became less competitive.
• FCF has been volatile—negative in some quarters due to massive capex, now barely positive at $900M.
• FCF per share is essentially zero on a trailing basis once you strip out asset sales.

Valuation vs History & Peers:

Metric Intel AMD TSMC Forward P/E 50-60x ~25x ~20x Price/Sales ~3x ~8x ~8x EV/EBITDA ~25x ~20x ~15x

Intel trades at a higher P/E than AMD or TSMC despite worse execution and margins. The market is pricing in turnaround success that hasn’t materialized.

Red Flags / What’s Changing

Foundry Has No Customers: The 18A process is in risk production, but no major external customer has committed to volume. Microsoft has a small deal. Amazon has a small deal. That’s it. The big fish—Apple, Nvidia, AMD, Qualcomm, Broadcom—are all using TSMC.

Yield Problems: Intel’s 18A yields are still well below commercially comfortable levels—various leaks put them in low double digits at best, versus roughly mid-60% yields for TSMC’s N2. You can’t run a profitable foundry at that gap.

TSMC is At Least a Node Ahead: TSMC is already in volume production on 3nm and ramping 2nm. Intel is still trying to prove 18A works. In real-world production timing, that’s likely 1-2 years of daylight—and the gap isn’t closing.

CPU Market Share Erosion: AMD keeps taking server share. Arm-based chips are eating into laptops and data centers. Intel’s x86 server share has dropped 21 points in five years.

The Math Doesn’t Work Yet: Foundry needs “low- to mid-single-digit billions” in external revenue to break even (per CFO). External customers are contributing rounding-error tens of millions. That’s not a gap—it’s a business that doesn’t exist yet.

Expectations vs Reality

Street view: Consensus expects Intel to grow revenue low-single digits over the next 2 years, with margins stabilizing around 40% and EPS grinding toward $1.50-2.00 by 2027. The market is treating INTC as a “turnaround in progress” story that deserves a premium multiple because the foundry optionality is real and the government backstop reduces downside risk.

My view: I think the Street is too optimistic on timing. The foundry has no meaningful external revenue. Yields are in the low double digits. TSMC is at least a node ahead and pulling away. The CPU business is still bleeding share to AMD and Arm. Until I see proof—external customers committing volume, yields above 50%, Panther Lake shipping on time—I’m not paying 50-60x for a turnaround that’s “turning around.”

The gap between narrative and execution is where the risk lives.

Catalysts & Timeline

Bull path:

• Panther Lake ships on time in Q1 2026 and performs well → proves 18A works → attracts foundry interest
• External foundry customer announces volume commitment (12-24 months)
• 18A yields hit 50%+ by mid-2026 → cost structure improves → foundry losses narrow
• Server share stabilizes as new Xeon chips regain competitiveness

If this plays out, multiple re-rates from 50-60x toward 25-30x on higher earnings—stock goes to $50-60 over 3-5 years.

Bear path:

• Panther Lake delayed or underperforms → 18A credibility damaged
• No major external foundry customer by end of 2026 → $100B capex looking like a sunk cost
• TSMC 2nm ramps successfully → gap widens further
• AMD continues taking server share → Intel Products revenue declines

If this plays out, multiple compresses, earnings disappoint—stock revisits $15-20.

Timing: The next 12-18 months are critical. Panther Lake in Q1 2026 is the proof-of-concept moment. By end of 2026, we’ll know if the foundry has real external traction or if it’s just an expensive internal cost center.

Tactical Read

The stock is up 70-75% YTD, roughly doubled off its 2024 lows around $17-18. Currently trading at ~$34.50, about 19% below the October high of $42.48.

Momentum has faded from the October peak. Some institutions are trimming—Empowered Funds cut their position by 47% in Q2.

The chart says: traders front-ran the turnaround story. Now they’re waiting for proof. If proof doesn’t come (Panther Lake delays, foundry disappointments), the $25 level is the next real support.

Positioning & Flows

Factor bucket: Story / Speculative Turnaround. This isn’t value, growth, dividend, or quality—it’s a binary bet on whether the foundry strategy works.

Crowded or underowned: Neutral to slightly crowded after the 70-75% run. Hedge funds and momentum players piled in on the Nvidia partnership and government backstop narrative. Some are now trimming.

Rotation risk: If the market rotates away from speculative/story names toward quality or value, INTC could sell off hard even without company-specific bad news. The 50-60x multiple has no margin of safety.

Strategic View & Value Math

Short term (6-18 months): Likely chop. The stock has run hard and needs proof to go higher. Panther Lake launch in Q1 2026 is the next major catalyst. Without positive surprises, I’d expect range-bound trading between $28-40.

Long term (3-5 years): Binary. Either the foundry works and this is a $50-60 stock, or it doesn’t and this revisits $15-20.

Value Math:

Scenario Probability 3-5 Year Target Notes Bull 25% $55 Foundry works, external customers, margins expand Base 50% $28 Muddle through, foundry breaks even by 2028, CPU share stabilizes Bear 25% $18 Foundry fails, CPU share keeps bleeding, government money isn’t enough

Probability-weighted fair value: ~$30

At $34.50 today, I’m paying above fair value. The stock is pricing in better-than-base-case outcomes.

What Would Change My Mind

I’d get more constructive and potentially buy above my watchlist range if:

• External foundry revenue hits $500M+ per quarter (proof customers are real)
• 18A yields reach 50%+ (proof the process works at scale)
• Intel wins a marquee foundry customer (Apple, Nvidia, AMD, Qualcomm)
• Server market share stabilizes or grows for two consecutive quarters
• Foundry operating losses narrow to under $1B/quarter

Any of those would tell me the turnaround is actually turning—and I’d pay up for that proof.

Kill Switch

I’d avoid entirely or exit if:

• Foundry losses exceed $3B/quarter for three consecutive quarters
• 18A volume production slips into 2027
• A major foundry customer publicly cancels or downgrades their Intel commitment
• CHIPS Act funding gets clawed back or reduced materially
• Management reverts to “vision” talk without concrete foundry customer wins

Where I’d Get Interested

Ticker Current Price My Watchlist Range At That Range INTC ~$34.50 $22–25 ~35-40x forward P/E, paying for broken business + optionality

At $22-25, I’m paying for a company that’s clearly struggling, with free optionality on the turnaround working. At $34, I’m paying for success that hasn’t been proven yet.

The Playbook (What I’d Do)

If I owned INTC today: I’d hold a small speculative position if I got in near the lows, but I wouldn’t add at $34. The easy money has been made. I’d trim into strength and wait for a better re-entry.

If I owned nothing and wanted semiconductor exposure: I’d put INTC on a watchlist with alerts around $24. If the stock pulls back 25-30% on a foundry disappointment or earnings miss, that’s when the risk/reward lines up. If it never comes to me, so be it.

If I were running an income portfolio: I wouldn’t touch this. Intel’s ~1.5% yield isn’t worth the volatility. This is a turnaround speculation, not an income play.

Final Take

Intel is the kind of turnaround I find genuinely interesting. The foundry bet is bold. The government backing is real. If it works, this becomes one of the most strategically important tech companies in America.

But “if it works” is doing a lot of heavy lifting.

At $34, I’m paying for turnaround success that hasn’t happened yet. The foundry has no customers. The yields don’t work. The CPU business is still losing share. The stock has already run 70-75% this year on hope and government money.

INTC goes on the watchlist at $22-25. At that range, I’m paying for a broken business with optionality—not pricing in a miracle. If the pullback never comes, I’ll miss it. I’d rather miss a winner than buy hope at a premium.

Turnaround stories reward patience, not FOMO. I’ve got time.

Everything here is how I’m thinking about INTC for my own portfolio.

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Disclaimer: This content is for informational and educational purposes only—not financial advice. Do your own due diligence before investing. Nothing here is a recommendation to buy or sell any security.