VALUATION HIGHLIGHTS

1. Client Computing constitutes 62% of the Trefis price estimate for Intel's stock.
2. Data Center & AI constitutes 34% of the Trefis price estimate for Intel's stock.

WHAT HAS CHANGED?

Q4 2025 Earnings

Intel posted better-than-expected Q4 2025 revenue of $13.7 billion, down 4% year-over-year, while adjusted earnings stood at $0.15 per share. However, guidance for the current quarter was softer than expected, as it spends heavily to scale up production of its latest chips while contending with inventory constraints.

Intel's AI bets

Intel is aiming to increase its presence in the AI space with its Gaudi 2 and upcoming Gaudi 3 accelerators, which are designed for AI workloads in data centers. The company is looking to compete on price, offering systems with eight Gaudi 2 accelerators for around $65,000—about one-third the price of comparable platforms. Although Intel faces considerable challenges, given Nvidia's early lead and software ecosystem for AI development, the market could seek alternatives to Nvidia chips, given their high pricing.

POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE

Below are key drivers of Intel's value that present opportunities for upside or downside to the current Trefis price estimate for Intel:

• Intel has seen its Data Center & AI Business post a weak performance over the last few years. The revenues stood at $16.9 billion in 2022 and declined to levels of about $12 billion in 2024, driven by mounting competition and slower demand for CPUs. However, sales improved to about $17 billion in 2025. We expect sales to grow to levels of about $23 billion by 2032. However, Intel is facing mounting competition in the data center space, with rival AMD also gaining ground. If Intel's data center revenues remain flat at current levels of about $12 billion, then we could see a downside of about 10% from our current price estimate.

• The Data Center Group's EBITDA margins stood at around 47% in 2025. While we forecast that margins will rise to about 58% by 2032, driven by new launches such as the Sierra Forest chip and Granite Rapids chip, there could be a downside of about 20% if margins remain flat at current levels.

For additional details, select a driver above or select a division from the interactive Trefis split for Intel at the top of the page.

BUSINESS SUMMARY

Intel is best known for manufacturing and selling microprocessors, which serve as the central processing unit (CPU) in servers, desktops, and notebooks. As the most critical component driving a computer's power and performance, microprocessors are central to Intel's business. The company has also been ramping up investments in its foundry operations, aiming to produce chips for other semiconductor companies.

SOURCES OF VALUE

Microprocessors and chipsets used in servers, desktops, and notebooks are the major sources of revenue for the company.

KEY TRENDS

Intel's push into foundry business

Intel is also betting heavily on becoming a foundry player, producing chips for other semiconductor companies and taking on the likes of TSMC and Samsung Electronics. While the business has posted heavy losses in recent years, those losses have begun to narrow as execution improves. The Intel 3 process node is now in high-volume manufacturing and is shipping in Xeon 6 data center processors. Chips built on the Intel 18A process have entered customer sampling with PC OEMs, and early tape-outs are underway. Intel continues to position 18A as the inflection point that could enable it to reclaim process leadership.

Market Share Loss To AMD

AMD’s Ryzen processors have remained in strong demand. Ryzen CPUs continue to offer competitive performance and power efficiency at aggressive price points, enabling AMD to steadily take share from Intel over recent quarters. AMD is now shipping products built on advanced 4nm and 3nm process nodes, while Intel is still ramping newer nodes across its lineup. With next-generation launches spanning Ryzen, Radeon, and EPYC, AMD is positioned to press its share gains further in the coming quarters. Beyond Ryzen, AMD's growth in the server market is more worrying for Intel. AMD's EPYC processors have been gaining a share amid strong performance at a lower price point.

On-Going Server Virtualization

Server virtualization is essentially server consolidation that enables running multiple applications on a single server instead of on multiple servers. Server virtualization is driving a shift in the mix towards higher-end servers, which require multi-core processor servers that tend to be more complex and more expensive than traditional single-core processors.

Increasing Importance of Smartphone and Tablet Chips

While PC shipments have remained weak in recent years, mobile devices, especially smartphones and tablets, continue to see steady unit growth. Even as developed markets approach saturation, replacement cycles and AI-capable devices are sustaining demand, keeping mobile silicon a structurally important end market.

PC Market Opening up to ARM (Advanced RISC Machine)

New Windows releases now fully support ARM-based processors, opening the PC market to ARM vendors that have historically been excluded by x86 dominance. This shift increases competitive pressure on Intel, as ARM designs from players aligned with ARM gain traction in laptops and tablets running Microsoft’s ecosystem, potentially eroding Intel’s long-held market share over time.