What the New US Stake Means for Intel’s Future Valuation

Trying to figure out what to do with Intel stock? You are definitely not the only one. Between big swings in sentiment and global headlines, the chip giant’s shares have been on quite a ride lately. Just in the last month, Intel rallied 8.4%, adding to a hefty 19.1% gain so far this year. Over the past twelve months, the stock is up 22.5%. Keep in mind that the three- and five-year returns are still underwater, at -13.4% and -46.2% respectively. Clearly, investors are reacting to more than just the latest quarter’s numbers.

So, what’s behind some of these moves? Headlines have definitely played a role, ranging from sweeping U.S. government moves to take a stake in Intel and restrict key business shifts, to talk of Samsung investing to boost their rivalry with TSMC. On the risk front, Intel also got pulled into reports about tech firms enabling China’s surveillance state, and new tariff policies that could tighten global chip flows. Yet despite the headlines, there is a sense that risk has shifted and the potential for upside growth is back on the table.

But what about Intel’s valuation right now? According to a systematic value score that weighs six different fundamental checks for undervaluation, Intel scores a 5 out of 6. That is a strong reading, suggesting market pessimism may be overdone or at least, that most valuation models find the stock attractively priced. Next, let’s break down those valuation methods and, more importantly, look for smarter ways to judge whether Intel deserves your attention today.

Why Intel is lagging behind its peers

Approach 1: Intel Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) method estimates a company’s worth by projecting its future cash flows and discounting those values back to today. This provides a picture of what the business might truly be worth now. For Intel, this approach uses a 2 Stage Free Cash Flow to Equity model, capturing both near-term analyst estimates and longer-term projections.

According to recent data, Intel’s current Free Cash Flow (FCF) stands at negative $13.35 billion, reflecting significant reinvestment or challenges in cash generation. Forecasts suggest a sharp turnaround, with FCF expected to reach positive $15.26 billion by 2029 and climbing to approximately $29.25 billion by 2035. Analyst forecasts inform the first five years, and subsequent years are extrapolated to reflect probable growth trajectories.

Using these assumptions, the DCF model estimates Intel’s fair value at $40.73 per share. This is about 40.9% above where the market currently prices the stock, indicating a notable margin of undervaluation.

In summary, the DCF analysis suggests that Intel shares could be significantly mispriced, especially as recovery in cash flow materializes over the coming years.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Intel.

Our Discounted Cash Flow (DCF) analysis suggests Intel is undervalued by 40.9%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Intel Price vs Sales

The Price-to-Sales (P/S) ratio is a popular way to value companies like Intel, especially in industries where profits may be volatile but revenue remains more stable. For mature, profitable firms, this multiple helps investors understand how much the market is willing to pay for each dollar of sales, regardless of short-term swings in earnings. Higher growth expectations and lower perceived risk often support a higher P/S ratio; uncertain prospects or industry headwinds tend to push it lower.

Currently, Intel trades at a P/S ratio of 2.1x. That is lower than the semiconductor industry average of 4.1x and also well below its major peers, which average 16.4x. On the surface, this makes Intel appear relatively cheap compared to others in its space.

However, a more nuanced view comes from Simply Wall St’s proprietary “Fair Ratio,” which is 3.9x for Intel. Unlike a simple peer or industry average comparison, the Fair Ratio adjusts for the company’s specific growth outlook, risk factors, profit margins, sector, and market cap, providing a more tailored benchmark for valuation.

Stacking Intel’s current 2.1x against the 3.9x fair ratio, the stock looks undervalued on a sales basis, with room for upside as its outlook improves.

Result: UNDERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Intel Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. Narratives are more than just numbers. They are stories that connect your perspective on a company, like Intel, with your financial assumptions, such as fair value estimates and forecasts for future revenue, earnings, and margins.

A Narrative links Intel’s business story to a set of financial predictions and then to a clear fair value. This allows you to see exactly why someone believes Intel is undervalued, overvalued, or fairly priced. It's an easy and accessible tool, available to all users on the Simply Wall St Community page, trusted by millions of investors worldwide.

With Narratives, investors can quickly see if their view on Intel’s outlook suggests it is a buy or a sell by comparing the Fair Value derived from their story to the current share price. Whenever the facts change, such as a new earnings report, headline, or strategic move, Narratives update automatically, keeping your investment thesis grounded in the latest data.

For example, some investors believe Intel could be worth as much as $79 per share due to an ambitious turnaround and growth in AI. More cautious views see a fair value closer to $16, reflecting concerns over margin recovery and competition.

For Intel, we'll make it really easy for you with previews of two leading Intel Narratives:

• 🐂 Intel Bull Case

  Fair Value: $79.00

  Current price is approximately 69.5% below this fair value.

  Revenue Growth Rate: 10%

  • Intel’s aggressive new product roadmap and significant investment in R&D are expected to drive a turnaround and double EPS within five years.
  • The company aims to recapture market share from AMD and benefit from an inevitable cyclical recovery in PC demand, with new processors offering improved performance and efficiency.
  • Intel's foundry ambitions, partnerships, and optionality from emerging segments like Mobileye provide additional long-term growth catalysts despite ongoing execution and market risks.
• 🐻 Intel Bear Case

  Fair Value: $19.66

  Current price is approximately 22.6% above this fair value.

  Revenue Growth Rate: 3%

  • Intensified competition from AMD and ARM is expected to erode Intel's market share across key segments, particularly as rivals launch more energy-efficient and higher-performing chips.
  • Delays in process technology adoption and product stability issues (such as recent defects and instability in 13th and 14th Gen CPUs) have damaged Intel’s reputation and may result in ongoing operational and legal challenges.
  • Subdued revenue growth is forecast as cost-cutting measures and market perception limit upside, with risks that Intel lags in both the AI and data center markets.

Do you think there's more to the story for Intel? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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