Intel Finally Has a Shot at a Comeback—If It Can Execute

Intel (NASDAQ:INTC | INTC Price Prediction) finally has a shot at making new all-time highs after an incredible melt-up year. Even though the page has finally turned on a historic bounce-back year, the momentum doesn’t look like it’s ready to slow down, at least not anytime soon, with shares up just shy of 75% year to date. As one of the hottest stocks on the market, questions linger as to whether there’s still any value to be had in a name that’s since been crowned as a legitimate contender in the AI chip race.

Combined with its foundry progress and new deals (and investments) in place, and Intel stock hasn’t looked this investable in a long time. Even if the easy money has already been made, there’s no shortage of bulls who think that good times can keep coming. In prior pieces, I highlighted the rock-bottom expectations and the sound comeback plan as some of the main reasons to own the stock. But that was way back when Intel stock was trading at a fraction of the price it’s going for right now.

After a violent melt-up rally, value-conscious contrarians might be right to steer clear or, at the very least, wait for some sort of pullback. Intel isn’t a cheap stock anymore. But, then again, the firm has shown signs that it can execute on its game plan. I’ll admit, the turnaround plan seemed more like a pipe dream than anything else when shares were trading in the teens. Nowadays, it feels like the comeback has legs to take the stock to fresh new highs.

Intel has caught up. Now the question is: can it pull ahead?

With Panther Lake, Intel is back when it comes to chip strength. It wasn’t easy to execute on the 18A game plan, but it pulled it off, and with that, management deserves a gold star for execution, at least so far in the game. Up ahead, there are bigger, bolder milestones to hit.

With its big Tesla (NASDAQ:TSLA) Terafab project involvement and the potential for a bounce back in the AI PC once agents get better at using software tools and finding their way around an operating system in a safe, transparent manner, I think it’s unwise to bet against Intel, even if the valuation is starting to get just a bit on the frothy side.

There’s no shortage of drivers, but, at the same time, the former “cigar butt” stock might face a vicious valuation reset if it stumbles on the path ahead. If Tesla has faith in the firm enough to team up with it, I think the days of fumbles may very well stay in the past for Intel.

The big question for Intel is whether its brilliant streak will be followed by more strength. Looking into next year, the 14A shift is a big deal, and there’s no room for error at Intel’s new, hefty price of admission. And, of course, analysts will have the magnifying glasses out as the company’s foundry business looks to hit break-even.

The rewards are great if Intel can keep executing

If Intel can keep hitting milestones and executing with perfection, I think the stock might still be undervalued relative to the longer-term growth runway. As the foundry goes profitable and the firm keeps launching competitive CPUs on the cutting edge, perhaps dismissing analyst calls for more upside might not be the way to go, especially since Intel may very well be the lite version of Taiwan Semiconductor (NYSE:TSM) that lacks the geopolitical risks of operating primarily within Taiwan.

Intel might not be the behemoth that Taiwan Semiconductor is, but if it can execute, shift smoothly into profitability, and keep its next-generation chips on schedule, I think there’s a case for Intel commanding a multiple far higher than that of Taiwan Semiconductor. I guess it comes down to whether you think Intel can keep executing on its game plan.