Intel Clawed its Way Back to Relevance in 2025, Will the Rally Continue?

Intel Corporation (NASDAQ: INTC) entered 2025 as a company many had written off, struggling to compete in the AI chip race and grappling with leadership turmoil following the ouster of CEO Pat Gelsinger.

Yet through a combination of strategic partnerships, aggressive cost-cutting, and renewed investor confidence, Intel’s stock surged approximately 84% over the course of the year, outperforming rivals Nvidia and AMD. The appointment of industry veteran Lip-Bu Tan as CEO in March proved to be a catalyst for change, as he brought discipline to operations and struck a series of transformative deals that reshaped the company’s trajectory.

As 2026 begins with Intel trading around $41.90 per share and showing a year-to-date return exceeding 13%, investors are now asking whether this remarkable turnaround has further room to run.

A Defining Year for Intel Under Lip-Bu Tan

When Lip-Bu Tan took the helm at Intel in March 2025, he inherited a company in crisis mode. The new CEO wasted no time implementing sweeping changes, slashing costs, laying off employees, and scrutinizing entire business lines with what he described as a “no more blank checks” approach. Under his leadership, Intel’s foundry ambitions continued but with a more disciplined strategy, tying investments in next-generation processes like Intel 14A directly to confirmed customer commitments.

The deals Tan orchestrated proved instrumental in Intel’s resurgence. He secured an $8.9 billion equity investment from the U.S. government, unlocking previously frozen grant money, followed by a $2 billion investment from SoftBank. The crown jewel, however, was an unexpected $5 billion partnership with Nvidia that will see the companies collaborate on data center and PC CPUs incorporating technologies from both firms.

Tan’s tenure has not been without controversy, including political scrutiny over his venture capital ties to Chinese companies and a lawsuit from TSMC alleging trade secret violations by a former executive who joined Intel.

Despite these challenges, Tan addressed concerns directly with the Trump administration, and Intel secured a restructured CHIPS Act arrangement that gave the government a 10% ownership stake in exchange for $5.7 billion in equity investment.

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Gaming Chips and the Road Ahead

Intel is signaling renewed ambitions in the gaming market as 2026 gets underway. At CES 2026, Intel executive Daniel Rogers revealed that the company is developing a dedicated gaming processor alongside a broader platform combining hardware and software capabilities.

Built on Intel’s Core Series 3 processors, this gaming-focused initiative represents a strategic push to compete more directly with AMD and Nvidia, both of which have significantly expanded their gaming portfolios in recent years.

The announcement boosted Intel shares by approximately 2% and reflects management’s effort to diversify revenue streams beyond traditional PC and data center markets.

While specific details remain scarce, Intel has promised to share more about the processor and platform later in 2026. Additionally, rumors have emerged that Apple may be considering Intel’s 18A process for some M-series processors in 2027, which would represent a massive validation of Intel’s foundry capabilities.

INTC Stock Performance and Key Metrics

Intel’s financial position has strengthened considerably, though challenges remain. The company reported third-quarter 2025 revenue of $13.65 billion, beating Wall Street expectations of $13.14 billion, with adjusted earnings of 23 cents per share far exceeding the 1 cent analyst forecast. Revenue grew 3% year over year, marking a return to growth after periods of decline.

Current metrics paint a mixed picture of a company in transition. Intel’s market capitalization stands at approximately $191 billion with an enterprise value of $206.6 billion. The trailing P/E ratio of 667 reflects the company’s still-thin profit margins, with a profit margin of just 0.37% and diluted EPS of $0.06.

However, the forward P/E of 68 suggests analysts expect significant earnings improvement. Intel maintains substantial liquidity with $30.9 billion in total cash, though levered free cash flow remains negative at $4.4 billion.

Looking at analyst sentiment, price targets range from $20.40 to $52.00, with an average of $38.31 compared to the current price around $41.81.

The most recent analyst action came from Melius Research, which upgraded Intel to a Buy rating. With a 52-week range of $18.51 to $41.88, Intel is trading near its highs, reflecting the dramatic sentiment shift that occurred throughout 2025.

The question now facing investors is whether the operational improvements and strategic partnerships can translate into sustained profitability and continued stock appreciation.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.