Intel’s stock has experienced a significant rally, gaining over 84% in 2025 and more than 22% year-to-date as of the recent market close. This surge follows a period when the company was reported to have hit multi-year lows. Despite this impressive performance, Intel’s recent quarterly earnings report has raised concerns among investors, leading to a notable decline in stock value.
The company’s Q4 2025 earnings report revealed a mixed financial picture. Intel reported revenues of $13.7 billion, surpassing analyst expectations of $13.4 billion. However, the company faced a widening net loss of $591 million, compared to a loss of $126 million in the same quarter the previous year. Adjusted earnings per share also exceeded expectations, coming in at $0.15 against the anticipated $0.08.
Despite these positive indicators, Intel’s guidance for the current quarter has spooked investors. The company forecasts revenues between $11.7 billion and $12.7 billion, with the midpoint falling below Wall Street estimates of $12.5 billion. Additionally, Intel’s guidance for adjusted earnings at breakeven is lower than the expected $0.05, raising questions about the company’s short-term outlook.
The sell-off following the earnings report came after a period of remarkable stock performance, with Intel shares having risen nearly 109% in the year leading up to the report. This sudden decline suggests that investors had anticipated a flawless earnings announcement, which did not materialize.
Intel’s financial position remains relatively strong, bolstered by investments from companies like Nvidia and Softbank. The company ended 2025 with cash and cash equivalents totaling $14.26 billion. These funds have been bolstered by recent capital raises and the U.S. government’s conversion of its debt to equity, which have increased Intel’s outstanding share count but provided much-needed liquidity.
Despite these financial challenges, Intel is actively working on a turnaround strategy. The company has made significant investments in its foundry business, although it has yet to announce major partnerships. There are rumors that Apple is in discussions with Intel regarding potential collaborations. Additionally, Intel’s Custom Application-Specific Integrated Circuit (ASIC) segment is growing, currently operating at an annualized run rate of $1 billion and representing a total addressable market of $100 billion.
At the recent CES 2026, Intel introduced its new Panther Lake processors, which have received positive feedback from the market. The increasing demand for Central Processing Units (CPUs) in the AI domain is also a promising sign for the company’s future.
Valuing Intel presents challenges, particularly given its current forward price-to-earnings (P/E) ratio of 282x and a P/E-to-growth (PEG) ratio of 28.57x. After briefly falling below its book value, Intel now trades at approximately double that value. The narrative around Intel focuses on the potential for long-term earnings recovery.
During the Q4 earnings call, Lip-Bu Tan, Intel’s CEO, highlighted the substantial market opportunities available to the company. He stated, “The breadth of our IP and know-how across silicon design, system level integration, wafer manufacturing, and advanced packaging uniquely position us to capitalize on these AI-driven trends.” Nonetheless, he acknowledged that Intel’s execution must continue to improve.
While the recent earnings report has led to a downward adjustment in stock prices, the long-term outlook for Intel remains cautiously optimistic. For those considering whether to buy the dip, it may be prudent to evaluate whether much of the anticipated growth has already been factored into current valuations.
