Key takeaways
View moreIntel appears moderately undervalued based on its below-industry-average valuation multiples and potential for turnaround. While the company faces significant challenges, including negative profitability and cash flow, its strong brand, ongoing transformation efforts, and growth opportunities in AI and foundry services suggest potential upside. The current valuation seems to price in many risks while potentially undervaluing the company's turnaround potential.
- Intel's revenue decline and negative net income highlight the urgent need for successful execution of its turnaround strategy, including cost reduction and operational efficiency improvements.
- The company's weaker liquidity ratios compared to industry averages indicate potential short-term financial strain, necessitating improved working capital management and cash flow generation.
- Geopolitical tensions and regulatory risks pose significant threats to Intel's supply chain and market access, requiring proactive risk management and diversification strategies.
- The establishment of Intel Foundry as an independent subsidiary and the refinement of its AI strategy are critical for driving future growth and competitiveness in the semiconductor industry.
- Intel's stock underperformance relative to its peers underscores investor concerns about its turnaround progress and competitive positioning, requiring sustained improvement in financial performance and market confidence.
- Management's focus on organizational transformation, cost reduction, and revitalizing engineering talent is essential for fostering innovation and agility.
- The anticipation of PC TAM growth driven by the end of Windows 10 support and the adoption of AIPCs presents a significant growth opportunity for Intel's Client Computing Group.
- The company's negative free cash flow necessitates careful capital allocation and deleveraging of its balance sheet to ensure long-term financial stability.
- Analysts are closely monitoring Intel's ability to balance its internal product roadmap with foundry demands, improve gross margins, and acquire new foundry customers, which are key indicators of its turnaround progress.
- The increasing economic uncertainty and potential for tariffs require a conservative approach to managing the business and mitigating potential risks.
Evaluation summary
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Company Overview:
- Intel Corp. (INTC) designs, manufactures, and sells computer products and technologies, delivering computer, networking, data storage, and communications platforms. Its segments include Client Computing Group (CCG), Data Center and AI (DCAI), Network and Edge (NEX), Mobileye, Accelerated Computing Systems and Graphics (AXG), Intel Foundry Services (IFS), and All Other.
- The CCG segment focuses on platforms for notebooks, desktops, and mobile devices, while DCAI delivers solutions to cloud service providers and enterprise customers. NEX offers computing system solutions, Mobileye develops driving assistance and self-driving solutions, and AXG provides products for high-performance computing and graphics. IFS offers full-stack foundry solutions.
- For comparative analysis, Intel is benchmarked against the Technology Select Sector SPDR Fund (XLK) and its industry peers, NVIDIA Corp. (NVDA) and Taiwan Semiconductor Manufacturing Co., Ltd. (TSM).
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Financial Performance:
- Intel's financial performance in recent quarters has been challenging. The company reported revenue of $12.667 billion for the quarter ending March 31, 2025, down from $14.260 billion in the previous quarter.
- Net income has been negative, with a net loss of $821 million for the quarter ending March 31, 2025, compared to a net loss of $126 million in the previous quarter. This decline is significantly impacted by unusual expenses.
- Gross profit margin was 36.88% for the quarter ending March 31, 2025, compared to 39.16% in the previous quarter. EBITDA margin was 19.97%, down from 21.85% in the previous quarter.
- Return on Assets (ROA) was -9.97%, Return on Equity (ROE) was -18.66%, and Return on Invested Capital (ROIC) was -12.86% for the quarter ending March 31, 2025. These figures are significantly below industry averages, which are -12.76% for ROA, -39.71% for ROE, and -23.26% for ROIC.
- The SEC filings indicate that Intel's revenue declined 2% in 2024 due to lower all other revenue and lower Intel Foundry revenue, partially offset by higher Intel Products revenue. The consolidated gross margin decreased 20% in 2024 due to higher impairment charges, accelerated depreciation, and other cost factors.
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Operational Efficiency:
- Intel's total current assets decreased from $47.324 billion as of December 31, 2024, to $42.134 billion as of March 31, 2025. Total current liabilities decreased from $35.666 billion to $32.174 billion over the same period.
- Working capital decreased from $11.658 billion as of December 31, 2024, to $9.960 billion as of March 31, 2025, indicating a slight decrease in short-term liquidity.
- Net operating cash flow was $813 million for the quarter ending March 31, 2025, down from $3.165 billion in the previous quarter. Free cash flow to equity was negative $4.370 billion for the same period.
- Total capital expenditure was $5.183 billion for the quarter ending March 31, 2025, while depreciation, depletion, and amortization were $2.674 billion.
- The company did not pay cash dividends during the quarter ending March 31, 2025.
- The current ratio was 1.31 as of March 31, 2025, and the quick ratio was 0.93, both below the industry average of 4.36 and 3.57, respectively.
- The debt-to-equity ratio was 50.27% as of March 31, 2025, which is below the industry average of 64.11%.
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Growth Opportunities:
- Intel is focused on expanding its foundry services and launching new products to drive future revenue growth. The company is also refining its AI strategy to develop full-stack AI solutions for enterprise customers.
- The company is investing in R&D to advance its process technology and product roadmaps. SEC filings mention significant long-term investments in R&D and manufacturing facilities.
- Intel is working to establish Intel Foundry as an independent subsidiary to provide clearer separation for external foundry customers and suppliers.
- The earnings call highlighted the anticipation of PC TAM growth driven by the end of Windows 10 support and the adoption of AIPCs, and expecting double-digit CPU core growth in the traditional server market.
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Recent Developments and Market Sentiment:
- The earnings call on April 24, 2025, revealed that Intel's Q1 2025 revenue exceeded guidance at $12.7 billion. Non-GAAP gross margin was 39.2%, also above guidance, and EPS was 13¢, surpassing the breakeven guidance.
- Management is focused on organizational transformation, cost reduction, and revitalizing engineering talent. A four-day-per-week return to office policy is mandated starting in Q3 2025.
- The company is refining its AI strategy with a focus on emerging areas of interest and building trust with foundry customers.
- The market sentiment is cautiously optimistic, with analysts closely monitoring Intel's ability to balance its internal product roadmap with foundry demands, improve gross margins, and acquire new foundry customers.
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Risks and Threats:
- Intel faces intense competition and rapid technological change in the semiconductor industry. SEC filings highlight the complexities and uncertainties in developing and implementing new semiconductor products and manufacturing process technologies.
- Geopolitical tensions, trade policies, and regulatory risks, particularly between the US and China, present significant uncertainties that could disrupt Intel's supply chain, operations, and access to markets.
- The company's financial performance has been significantly impacted by non-cash impairments, restructuring charges, and a valuation allowance against its US deferred tax assets.
- Ongoing litigation with VLSI Technology LLC over patent infringement claims and regulatory proceedings related to the European Commission's 2009 competition decision pose legal and financial risks.
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Valuation Analysis:
- The enterprise value to EBITDA ratio is 18.23, and the enterprise value to sales ratio is 2.53 as of March 31, 2025. These ratios are lower than the industry averages of 232.96 and 12.19, respectively, suggesting potential undervaluation.
- Potential catalysts include successful execution of Intel's turnaround strategy, expansion of foundry services, and launch of new products. Headwinds include intense competition, geopolitical tensions, and macroeconomic uncertainty.
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Price Performance:
- Intel's stock price has fluctuated between $18.13 and $24.22 from March 24, 2025, to May 20, 2025.
- Intel Corp. (INTC) has generally underperformed the Technology Select Sector SPDR Fund (XLK) and its peers, NVIDIA Corp. (NVDA) and Taiwan Semiconductor Manufacturing Co., Ltd. (TSM), over the past three years.
- While INTC shows a positive return Year-To-Date (YTD) of 5.19%, it lags behind XLK's YTD return of 0.91%. Over longer periods, the underperformance is more pronounced.
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Future Outlook:
- Management guidance for Q2 revenue is $11.2 to $12.4 billion, with a gross margin of approximately 36.5% and breakeven EPS.
- The company expects DCAI to decline at a faster rate than CCG. Intel Foundry revenue is expected to decline due to pull-ins to Q1 and capacity constraints in Intel 7.
- The company anticipates a potential TAM contraction due to shifting trade policies and regulatory risks.
- The earnings call highlighted the increasing economic uncertainty and the need to manage the business with conservatism.
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Summary:
- Intel is undergoing a significant transformation amid intense competition and rapid technological changes in the semiconductor industry.
- The company's financial performance has been challenging, with declining revenues and negative net income, largely impacted by unusual expenses and restructuring charges.
- While gross profit and EBITDA margins are above industry averages, liquidity ratios are weaker, indicating potential short-term financial strain.
- Strategic initiatives, including expanding foundry services and launching new products, are crucial for future growth. However, geopolitical tensions, trade policies, and regulatory risks pose substantial threats to Intel's supply chain and market access.
- Intel's stock has underperformed both the Technology Select Sector SPDR Fund (XLK) and its peers, NVIDIA (NVDA) and Taiwan Semiconductor Manufacturing (TSM), reflecting investor concerns about its turnaround strategy and competitive positioning.
- Key factors for future performance include successful execution of strategic initiatives, effective cost management, and navigating the challenging macroeconomic environment.
- Areas requiring further monitoring include revenue growth, gross margin improvement, cash flow generation, and progress on strategic initiatives.
- Overall, Intel presents a high-risk, high-reward investment profile, with significant turnaround potential balanced against substantial execution risks and macroeconomic uncertainties.
Price history
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Fundamentals
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Insights
- Intel's revenue growth is a key area of concern, requiring strategic initiatives to improve market position and capitalize on opportunities in the AI era.
- The company's liquidity position is weaker than industry peers, necessitating improved working capital management and cash flow generation.
- Non-recurring items significantly impact net income, making it difficult to assess sustainable earnings, and management should focus on reducing these expenses.
- Intel's strategic investments in manufacturing facilities and technology advancements are crucial for maintaining a competitive edge in the semiconductor industry.
- Successful execution of Intel's strategy to establish Intel Foundry as an independent subsidiary, along with its cost-reduction initiatives, will be critical to improving its financial performance and profitability going forward.
Analysis
- Revenue
- Sales have shown a slight decrease, indicating potential challenges in market demand or competitive pressures.
- The company's revenue is significantly greater than the industry average, but the enterprise value to sales is lower, suggesting potential undervaluation.
- Management is focused on strategic initiatives to drive future revenue growth, such as expanding foundry services and launching new products.
- Profitability
- The company is currently experiencing negative net income, driven by significant unusual expenses and restructuring charges.
- Gross profit margin and EBITDA margin are above the industry average, indicating a better ability to manage production costs and generate earnings.
- Management is focused on cost reduction and operational efficiency to improve profitability.
- Liquidity
- The current ratio and quick ratio are below the industry average, indicating a weaker ability to meet short-term obligations.
- The company's liquidity position needs to be improved to ensure financial stability.
- Monitoring working capital management will be crucial for enhancing liquidity.
- Solvency
- The debt-to-equity ratio is below the industry average, indicating a less leveraged capital structure.
- The company's solvency position is relatively stable, but needs to be monitored closely.
- Debt management strategies will impact the company's financial flexibility and solvency.
- Operational Efficiency
- Increasing inventories and fluctuating receivables suggest potential inefficiencies in asset utilization.
- The company needs to improve its asset utilization to enhance operational efficiency.
- Management is focused on organizational transformation and streamlining operations to improve efficiency.
- Cash Flow Analysis - The company's cash flow from operations is volatile, impacted by negative net income and fluctuating working capital. - Free cash flow is negative, indicating a need for external financing or asset sales. - Improving net income and managing working capital effectively are crucial for generating positive cash flow.
- Risk Factors
- Intense competition and rapid technological change in the semiconductor industry pose significant risks.
- Geopolitical tensions, trade policy changes, and regulatory risks could disrupt the company's supply chain and access to markets.
- The company's financial performance has been significantly impacted by non-cash impairments, restructuring charges, and a valuation allowance against its US deferred tax assets.
- Future Outlook
- The company's future performance will depend on improving revenue growth, managing costs effectively, and generating positive cash flow.
- Strategic initiatives, such as expanding foundry services and launching new products, are expected to drive future growth.
- Monitoring key metrics, such as gross margin, operating margin, and free cash flow, will be crucial for assessing financial health.
- Profitability
Financial statements
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Public filings
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- Intel faces intense competition and rapid technological change in the semiconductor industry, requiring significant long-term investments in R&D and manufacturing that may not realize favorable returns.
- Geopolitical tensions, trade policy changes, and regulatory risks, particularly between the US and China, present major uncertainties that could disrupt Intel's supply chain, operations, and access to markets.
- Intel's financial performance in 2024 was significantly impacted by non-cash impairments, restructuring charges, and a valuation allowance against its US deferred tax assets, highlighting the volatility and risks in its business.
- Despite these challenges, Intel maintains a strong liquidity position and continues to invest in advancing its process technology, product roadmaps, and foundry capabilities to position itself for long-term competitiveness.
- Successful execution of Intel's strategy to establish Intel Foundry as an independent subsidiary, along with its cost-reduction initiatives, will be critical to improving its financial performance and profitability going forward.
Core Business and Operations:
- Intel is a global designer and manufacturer of semiconductor products, including CPUs and other solutions, primarily marketed and sold through its Intel Products business and manufactured via its Intel Foundry operations and other suppliers
- Intel's customers primarily include OEMs, ODMs, cloud service providers, and other manufacturers and service providers who buy Intel's products through distributor, reseller, retail, and OEM channels
- Intel's key products and solutions span client computing, data center and AI, network and edge computing, and foundry services
- Intel's main competitors include AMD, Qualcomm, NVIDIA, and other semiconductor companies offering competing CPU, GPU, and accelerator products
Industry and Market Trends:
- The semiconductor industry is highly competitive and subject to rapid technological, geopolitical, and market changes, with increasing demand for AI-related products and services
- Geopolitical tensions, trade policies, and regulatory changes, particularly between the US and China, present significant risks and uncertainties that could impact Intel's supply chain, operations, and access to markets
- The capital intensity of leading-edge semiconductor manufacturing continues to increase, requiring significant ongoing investments that may not realize a favorable return
Recent Events:
- Intel announced plans to establish Intel Foundry as an independent subsidiary to provide clearer separation for external foundry customers and suppliers
- Intel was awarded up to $3 billion in direct funding under the CHIPS Act for its Secure Enclave program
- Intel launched new product families, including the Intel Core Ultra 200V series processors and the Intel Xeon 6 processor with Efficient-cores and Performance-cores
- Intel announced a series of cost-reduction initiatives, including significant headcount reductions, as part of its 2024 Restructuring Plan
Risk Factors:
- Intense competition and rapid technological change in the semiconductor industry
- Significant long-term and inherently risky investments in R&D and manufacturing facilities
- Complexities and uncertainties in developing and implementing new semiconductor products and manufacturing process technologies
- Reliance on a complex global supply chain subject to disruptions, delays, and shortages
- Product defects, security vulnerabilities, and other product issues
- Increasing cybersecurity threats and privacy risks
- Intellectual property risks, including related litigation
- Ability to attract, retain, and motivate key talent
- Macroeconomic conditions and geopolitical tensions, including trade policy changes
- Debt obligations and reduced return of capital to stockholders
Legal Matters:
- Ongoing litigation with VLSI Technology LLC over patent infringement claims, with Intel accruing a $1 billion charge related to this matter
- Ongoing litigation and regulatory proceedings related to the European Commission's 2009 competition decision, with Intel accruing a $401 million charge for a related fine
- Consumer class action lawsuits related to security vulnerabilities in Intel's products, with Intel unable to estimate potential losses
Management's Discussion and Analysis:
- Intel's revenue declined 2% in 2024 due to lower all other revenue and lower Intel Foundry revenue, partially offset by higher Intel Products revenue
- Intel's consolidated gross margin decreased 20% in 2024 due to higher impairment charges, accelerated depreciation, and other cost factors
- Intel's operating expenses increased 2% in 2024, with R&D and MG&A expenses representing 41.5% of revenue
- Intel recognized significant restructuring, impairment, and valuation allowance charges in 2024 totaling over $15 billion
- Intel's liquidity and capital resources remain strong, with $25.6 billion in total cash and short-term investments as of December 2024
Earnings calls
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Earnings Report 2025Q1 (2025-04-24)
Key takeaways
- Cultural and Operational Transformation is Key: The success of Intel's turnaround hinges on its ability to fundamentally transform its culture and streamline its operations, as emphasized by the new CEO.
- AI Strategy is Critical but Evolving: Intel is actively refining its AI strategy, but the specific roadmap and competitive positioning remain uncertain, requiring close monitoring.
- Balancing Foundry and Internal Needs is a Challenge: Balancing the needs of the foundry business with internal product demands and capital allocation presents a complex challenge for Intel.
- Macroeconomic Uncertainty Adds Risk: Shifting trade policies, inflation, and regulatory risks create significant uncertainty for Intel's financial performance and outlook.
- Gross Margin Improvement is a Long-Term Goal: While Q1 gross margins exceeded expectations, sustained improvement will depend on product mix, cost management, and the successful ramp-up of new technologies like 18A.
Focus of management’s prepared remarks
- Organizational Transformation: Flattening the leadership structure by having critical product, manufacturing, and GNA functions report directly to the CEO to improve decision-making speed and agility.
- Cost Reduction: Lowering the calendar 2025 OpEx target to $17 billion and the calendar 2026 target to $16 billion. Reducing gross CapEx target for 2025 to $18 billion.
- Engineering Talent Revitalization: Rebuilding the engineering talent pool by promoting internal leaders, bringing back lost talent, and recruiting new people.
- Return to Office Mandate: Implementing a four-day-per-week return to office policy effective Q3 2025 to foster collaboration and innovation.
- Product Focus: Refocusing on building best-in-class products, particularly in the client and server businesses, to meet the needs of customers in the AI era.
- AI Strategy Refinement: Refining the AI strategy to develop full-stack AI solutions for enterprise customers, focusing on reasoning models, AgentIC AI, and physical AI.
- Foundry Customer Trust: Instilling a customer service mindset across the foundry business and embracing industry-standard EDA tools and best design practices.
- Balance Sheet Strengthening: Monetizing non-core assets, including a stake in Altera, and not spinning off Intel Capital but selectively investing to support the company's strategy.
- Market Growth Drivers: Anticipating PC TAM growth driven by the end of Windows 10 support and the adoption of AIPCs, and expecting double-digit CPU core growth in the traditional server market.
- Economic Uncertainty: Acknowledging increasing economic uncertainty due to shifting trade policies, persistent inflation, and increased regulatory risk, leading to a conservative approach in managing the business.
Focus of the analyst Q&A
- Balancing Internal Product Roadmap vs. Foundry:
- How to balance fixing the internal product roadmap with filling the foundry and ensuring sufficient unit volumes.
- How the flexibility and speed goals would be adopted and capitalized by going to foundry.
- Gross Margin Outlook:
- Puts and takes on gross margin for 2025 and 2026, considering strategic changes, cost-cutting, and lower CapEx.
- Impact of Lunar Lake margins, 18A ramp-up costs, and potential tariff implications on gross margins.
- Gross Margin Clean Number:
- What a clean gross margin number is for March, adjusting for COGS headwinds and grant accounting.
- Whether Q2 gross margin could be lower than the guided 36.5%.
- Foundry Customer Acquisition:
- How the company thinks about announcing new third-party foundry customers.
- Whether there is potential to add a tier-one customer this year.
- Product Execution Assessment:
- Assessment of Panther Lake and Clearwater Forest in the 18A portfolio.
- Whether these are leadership products and if further work is needed to achieve a leadership position.
- Seven Nanometer Capacity Constraints:
- Reasons for the seven-nanometer capacity constraints and their potential impact.
- Implications of stronger demand for older generation parts like Raptor Lake versus newer ones.
- AI Strategy and x86 Reinvention:
- Whether the AI strategy involves reinventing x86 or a broader portfolio including ARM.
- Whether the focus is more on edge AI.
- OpEx Guidance and Headcount Reductions:
- Whether the OpEx guide for 2025 and 2026 fully contemplates planned headcount reductions.
- Potential for additional savings over time.
- Data Center Performance:
- How the data center side is expected to perform through the year, especially in the second half.
- Impact of Granite Rapids and Xeon six, as well as competition from ARM.
- CapEx Rationalization:
- How CapEx will be managed through 2025-2026, considering the existing fab footprint.
- Potential for rationalizing CapEx given the current fab footprint.
- Panther Lake Launch Strategy:
- Implications of the macro environment and tariffs on the Panther Lake launch.
- How to think about the launch of new products given the demand pivot back to older products.
- Data Center AI Strategy:
- Strategy for products like Gowdy and Falcon Shores inside the data center.
- Updates on the strategy, particularly inside the data center.
- Turnaround Timeline and Metrics:
- Realistic timeline for Intel's turnaround.
- Key metrics to measure progress, such as share gains, gross margins, or free cash flow.
- IDM Structure Viability:
- Whether AT and A progress and low single-digit top-line growth are sufficient to make the manufacturing business viable.
- At what point the IDM structure needs to be rethought.
- RackScale Networking and AI Build-Out:
- How the company thinks about RackScale networking and the pieces Intel has internally to compete in the cloud infrastructure AI build-out.
- Whether UCIE or other building blocks are strategically needed to drive the networking scale upside.
- Altera Divestiture Impact on OpEx:
- Clarification on whether the OpEx structure for 2025-2026 is exclusive of the pending divestiture of a 51% stake in Altera.
Summary
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Financial Performance
Intel reported Q1 2025 revenue of $12.7 billion, exceeding guidance. Non-GAAP gross margin was 39.2%, also above guidance. EPS was 13¢, surpassing the breakeven guidance. Q1 operating cash flow was $800 million, with adjusted free cash flow at negative $3.7 billion due to growth CapEx of $6.2 billion. The company ended the quarter with a cash balance of $21 billion. Q2 revenue is guided to $11.2 to $12.4 billion with a gross margin of approximately 36.5% and breakeven EPS.
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Revenue Drivers
Better-than-expected Xeon sales drove Q1 revenue. The client side benefited from the end of service for Windows 10 and anticipation of AIPCs. DCAI revenue was driven by hyperscaler demand for host CPUs for AI servers and storage compute. Intel Foundry revenue increased due to pull-ins of Intel 7 wafers and increased advanced packaging services. The company anticipates a potential TAM contraction due to shifting trade policies and regulatory risks.
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Profit Margins and Cost Management
Non-GAAP gross margin for Q1 was 39.2%, driven by stronger demand for Raptor Lake and improved costs for Meteor Lake. The company is targeting OpEx of $17 billion in 2025 and $16 billion in 2026. Gross CapEx target for 2025 is now $18 billion. The company aims to monetize non-core assets, including a stake in Altera, and is not spinning off Intel Capital but will monetize its existing portfolio. The company is focused on deleveraging its balance sheet.
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Guidance and Outlook
Q2 revenue is guided to $11.2 to $12.4 billion, with a gross margin of approximately 36.5% and breakeven EPS. DCAI is expected to decline at a faster rate than CCG. Intel Foundry revenue is expected to decline due to pull-ins to Q1 and capacity constraints in Intel 7. The company expects NCI to grow in fiscal year 2026 to an updated range of $1.3 to $1.5 billion on a GAAP basis. Full-year revenue seasonality is expected to follow the last ten-year average, but with significant uncertainty due to potential tariffs and tight supply on older nodes.
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Strategic Initiatives
The company is simplifying its organizational structure and reducing layers of management. A four-day-per-week return to office policy is mandated starting in Q3 2025. The company is refocusing on its core client and server business and revitalizing its engineering core. The company is refining its AI strategy with a focus on emerging areas of interest and building trust with foundry customers. The company is prioritizing the ramp of Intel 18A and working closely with customers to define KPIs for Intel 14A.
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Management Commentary
CEO Lip Bu Tan emphasized the need to transform the company's culture, simplify operations, and empower smaller teams. He highlighted the importance of building best-in-class products and refining the AI strategy. CFO David Zinsner noted the increasing economic uncertainty and the need to manage the business with conservatism. Management expressed confidence in achieving OpEx and CapEx reduction targets and deleveraging the balance sheet. Lip Bu stated, "Organizational complexity and bureaucracies have been suffocating the innovation and agility we need to win."
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Industry and Market Conditions
The company sees growth in the PC TAM due to the end of service for Windows 10 and the adoption of AIPCs. The traditional server side is expected to see double-digit CPU core growth. However, the economic landscape is increasingly uncertain due to shifting trade policies, persistent inflation, and increased regulatory risk. The company is managing the business with conservatism due to the potential for an economic slowdown and the impact of tariffs.
Comparative analysis
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Benchmarks (as of 2025-05-20)
Technology Select Sector SPDR Fund (XLK)
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Performance Comparison:
- Intel Corp. (INTC) has generally underperformed the Technology Select Sector SPDR Fund (XLK) over the past three years. While INTC shows a positive return Year-To-Date (YTD) of 5.19%, it lags behind XLK's YTD return of 0.91%. Over longer periods, the underperformance is more pronounced. For example, over the past year, INTC's return was -32.56% compared to XLK's 9.61%. The two-year and three-year annualized returns further highlight this disparity, with INTC at -15.34% and -18.69%, respectively, while XLK stands at 22.61% and 21.36%, respectively.
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Risk and Return Analysis:
- Intel Corp. (INTC) has provided lower annualized returns compared to the Technology Select Sector SPDR Fund (XLK) over the past one, two, and three years. The annualized volatility of INTC has generally been higher than that of XLK, indicating that INTC's price fluctuations are more pronounced. The maximum drawdown for INTC was -65.95% on 04/08/2025, while the maximum drawdown for XLK was -33.56% on 10/12/2022. This suggests that INTC carries a higher risk profile compared to XLK.
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Risk-Adjusted Performance:
- The Sharpe ratios for Intel Corp. (INTC) have generally been lower than those of the Technology Select Sector SPDR Fund (XLK), indicating that XLK offers better risk-adjusted returns compared to INTC. The beta of Intel Corp. (INTC) has generally been above 1, indicating that the stock is more volatile than the market.
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Overall Assessment:
- Intel Corp. (INTC) has underperformed the Technology Select Sector SPDR Fund (XLK) over the analyzed period, with lower returns, higher volatility, and larger drawdowns. The Sharpe ratios indicate that XLK offers better risk-adjusted returns. The beta values suggest that INTC is more sensitive to market movements than XLK.
Peers Price History(as of 2025-05-20)
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Performance Comparison:
- Intel Corp. (INTC) has generally underperformed NVIDIA Corp. (NVDA) and Taiwan Semiconductor Manufacturing Co., Ltd. (TSM) over the past three years. While INTC shows a positive Year-To-Date (YTD) performance of 5.19%, it lags significantly behind NVDA and TSM in 1-month, 3-month, 6-month, 1-year, 2-year, and 3-year returns. For instance, over the last three years, INTC's return was -46.23%, compared to NVDA's impressive 696.5% and TSM's 120.51%. The recent one-month performance shows INTC at 12.9% versus NVDA at 38.66% and TSM at 30.83%, indicating a substantial underperformance in the short term as well.
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Risk and Return Analysis:
- Intel's annualized returns are consistently lower than its peers. The annualized 3-year return for INTC is -18.69%, while NVDA boasts 99.71% and TSM shows 30.16%. This indicates that INTC has not provided competitive returns compared to NVDA and TSM over this period.
- In terms of annualized volatility, NVIDIA (NVDA) consistently exhibits higher volatility compared to Intel (INTC) and Taiwan Semiconductor Manufacturing (TSM). As of May 2025, the annualized volatility for INTC is 76.6%, for NVDA is 71.74%, and for TSM is 52.99%.
- Intel Corp. (INTC) experienced a maximum drawdown of -65.95% on 2025-04-08, which is comparable to the maximum drawdown experienced by NVIDIA Corp. (NVDA) at -66.34% on 2022-10-14 and larger than Taiwan Semiconductor Manufacturing Co., Ltd. (TSM) at -56.62% on 2022-11-03. This suggests a higher risk profile for INTC, with significant potential for losses from previous peaks.
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Risk-Adjusted Performance:
- NVIDIA Corp. (NVDA) consistently exhibits higher Sharpe Ratios compared to Intel Corp. (INTC) and Taiwan Semiconductor Manufacturing Co., Ltd. (TSM) throughout the observed period. This indicates that NVDA has generally provided better risk-adjusted returns. INTC often shows negative Sharpe Ratios, particularly in 2022 and early 2023, suggesting that its risk-adjusted returns were poor during these times.
- The Beta values for Intel Corp. (INTC), NVIDIA Corp. (NVDA), and Taiwan Semiconductor Manufacturing Co., Ltd. (TSM) are consistently above 1 throughout the entire period, indicating that all three stocks are more volatile than the market. NVIDIA (NVDA) shows significantly higher Beta values (ranging from approximately 2.0 to 2.93) compared to Intel (INTC) and Taiwan Semiconductor Manufacturing (TSM), indicating it is substantially more sensitive to market movements. As of May 2025, the Beta values remain elevated, with NVIDIA around 2.07, Intel around 1.75, and Taiwan Semiconductor Manufacturing around 1.52. This indicates that all three stocks continue to exhibit higher volatility compared to the market.
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Overall Assessment:
- Based on the data, Intel Corp. (INTC) has underperformed its peers, NVIDIA Corp. (NVDA) and Taiwan Semiconductor Manufacturing Co., Ltd. (TSM), in terms of historical performance, annualized returns, and risk-adjusted returns. While INTC's volatility is moderate, its high drawdown and lower Sharpe Ratio suggest that it has not provided as favorable a risk-return trade-off as NVDA or TSM. NVIDIA, in particular, stands out with significantly higher returns and Sharpe Ratios, albeit with higher volatility. The higher Beta values for all three companies indicate greater sensitivity to market movements, but NVIDIA's substantially higher Beta suggests it is the riskiest among the three.
Peers Fundamentals(as of 2025-03-31)
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Market Position and Size:
- Intel's market capitalization is $92,779.74 million, significantly smaller than NVIDIA's $3,277,205.69 million and Taiwan Semiconductor Manufacturing's (TSM) $1,003,210.46 million.
- Intel's revenue for the most recent quarter is $53,044 million, while NVIDIA's is $130,497 million and TSM's is $96,696.2 million. Intel's EBITDA is $7,370 million, much lower than NVIDIA's $83,318 million and TSM's $66,532.7 million. Intel's net income is -$19,196 million, while NVIDIA's is $72,880 million and TSM's is $40,303.9 million.
- Intel is the smallest company by market capitalization in this peer group. While it generates substantial revenue, its profitability lags significantly behind NVIDIA and TSM.
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Profitability and Efficiency:
- Intel's Gross Profit Margin is 31.67%, significantly lower than NVIDIA's 74.99% and TSM's 56.02%. The industry average is -40.07%.
- Intel's EBITDA Margin is 13.89%, much lower than NVIDIA's 63.85% and TSM's 68.81%. The industry average is -1950.36%.
- Intel's Net Profit Margin is -36.19%, while NVIDIA's is 55.85% and TSM's is 41.68%. The industry average is -1877.28%.
- Intel's Return on Average Assets is -9.97%, while NVIDIA's is 82.2% and TSM's is 20.37%. The industry average is -12.76%.
- Intel's Return on Average Total Equity is -18.66%, while NVIDIA's is 119.18% and TSM's is 32.11%. The industry average is -39.71%.
- Intel's Return on Average Total Capital is -2.58%, while NVIDIA's is 113.42% and TSM's is 28.77%. The industry average is -15%.
- Intel is significantly less efficient in generating returns compared to its peers. Its negative returns indicate it is not effectively utilizing its assets, equity, or capital to generate profits.
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Financial Health and Stability:
- Intel's Current Ratio is 1.31, lower than NVIDIA's 4.44 and TSM's 2.39. The industry average is 4.36.
- Intel's Quick Ratio is 0.93, lower than NVIDIA's 3.88 and TSM's 2.18. The industry average is 3.57.
- Intel's Total Debt to Total Equity Ratio is 50.27, higher than NVIDIA's 12.95 and TSM's 23.69. The industry average is 64.11.
- Intel's Debt / EBITDA is 6.8, significantly higher than NVIDIA's 0.1 and TSM's 0.49. The industry average is 12.97.
- Intel's liquidity is weaker than its peers, as indicated by its lower current and quick ratios. Its higher debt-to-equity and debt/EBITDA ratios suggest a more leveraged financial position.
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Valuation and Market Perception:
- Intel's Enterprise Value To Sales is 2.53, significantly lower than NVIDIA's 26.75 and TSM's 8.41. The industry average is 12.19.
- Intel's Enterprise Value To EBITDA is 18.23, lower than NVIDIA's 41.87 but higher than TSM's 12.22. The industry average is 232.96.
- Intel's Price to Book Ratio is 0.93, significantly lower than NVIDIA's 41.46 and TSM's 7.24. The industry average is 6.05.
- Intel's Price To Sales Ratio is 1.74, significantly lower than NVIDIA's 25.54 and TSM's 10.37. The industry average is 14.28.
- Intel's valuation metrics are generally lower than its peers, reflecting its lower profitability and growth prospects.
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Cash Flow and Capital Management:
- Intel's Net Operating Cash Flow is $10,324 million, lower than NVIDIA's $64,089 million and TSM's $64,042.2 million.
- Intel's Total Capital Expenditure is $23,157 million, significantly higher than NVIDIA's $3,236 million but lower than TSM's $33,278.1 million.
- Intel's Free Cash Flow is -$12,833 million, while NVIDIA's is $60,853 million and TSM's is $30,764.1 million.
- Intel's negative free cash flow indicates it is not generating sufficient cash from operations to cover its capital expenditures.
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Growth and Future Prospect:
- Intel shows consistently lower growth compared to the peer group average in Sales/Revenue, EBITDA, Net Income, Basic Earnings per Share, and Free Cash Flow.
- Intel's 3-year and 5-year CAGR figures are significantly lower than the peer group average across all metrics. This indicates that Intel's longer-term growth trends are lagging behind its peers, which could impact its market share and competitive position.
- Intel's competitive position is weakening due to its inferior growth compared to peers.
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Potential for Investment:
- From an investment perspective, Intel appears less attractive compared to its peers. Its negative earnings, lower growth prospects, and weaker financial health raise concerns about its ability to generate shareholder value. While its valuation metrics may appear lower, they reflect its underperformance and potential risks.
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Key Risks and Considerations:
- Intel's negative net income and free cash flow raise concerns about its financial sustainability.
- Its lower profitability margins and returns on assets and equity indicate operational inefficiencies.
- Its higher debt levels and weaker liquidity pose financial risks.
- Its inferior growth prospects compared to peers suggest it may continue to lose market share.
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Overall Assessment:
- Intel's overall financial position, performance, and outlook are weak compared to its peer group and industry averages. It faces significant challenges in terms of profitability, efficiency, financial health, and growth.
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