Buy Or Fear Intel Stock?
Intel (NASDAQ:INTC) stock surged by almost 8% in Tuesday’s trading. Although there didn’t appear to be too many stock-specific developments to warrant a move of this magnitude, tech stocks in general have trended higher, led by optimism surrounding the generative artificial intelligence trend. Moreover, the U.S. and China have been holding trade talks this week in London with officials reportedly discussing restrictions on exports of various products, including semiconductors and rare earth metals. This could have also boosted Intel stock. Moreover, fund inflows into tech funds such as the Invesco QQQ Trust over the month of May were also strong, underscoring the positive sentiment for the sector.
Intel stock has been weighed down over the year or so, due to its massive investments into its foundry business and loss of market share in the server and PC space to the likes of AMD. Our analysis of Intel along key parameters of Growth, Profitability, Financial Stability, and Downturn Resilience shows that the company has a weak operating performance as detailed below. That said, if you seek upside with lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative, having outperformed the S&P 500 and generated returns exceeding 91% since its inception.
How Does Intel’s Valuation Look vs. The S&P 500?
Going by what you pay per dollar of sales or profit, INTC stock looks cheap compared to the broader market.
• Intel has a price-to-sales (P/S) ratio of 1.7 vs. a figure of 3.0 for the S&P 500
• Additionally, the company’s price-to-free cash flow (P/FCF) ratio is 8.6 compared to 20.5 for S&P 500
How Have Intel’s Revenues Grown Over Recent Years?
Intel’s Revenues have fallen over recent years.
• Intel has seen its top line decline at an average rate of 11.2% over the last 3 years (vs. an increase of 5.5% for S&P 500)
• Its revenues have decreased 4.0% from $55 Bil to $53 Bil in the last 12 months (vs. growth of 5.5% for S&P 500)
• Also, its quarterly revenues shrank 0.4% to $13 Bil in the most recent quarter from $13 Bil a year ago (vs. 4.8% improvement for S&P 500)
How Profitable Is Intel?
Intel’s profit margins are much worse than most companies in the Trefis coverage universe.
• Intel’s Operating Income over the last four quarters was $-4.1 Bil, which represents a very poor Operating Margin of -7.8% (vs. 13.2% for S&P 500)
• Intel’s Operating Cash Flow (OCF) over this period was $10 Bil, pointing to a moderate OCF Margin of 19.5% (vs. 14.9% for S&P 500)
• For the last four-quarter period, Intel’s Net Income was $-19 Bil – indicating a very poor Net Income Margin of -36.2% (vs. 11.6% for S&P 500)
Does Intel Look Financially Stable?
Intel’s balance sheet looks fine.
• Intel’s Debt figure was $50 Bil at the end of the most recent quarter, while its market capitalization is $96 Bil (as of 6/10/2025). This implies a poor Debt-to-Equity Ratio of 56.3% (vs. 19.9% for S&P 500). [Note: A low Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $21 Bil of the $192 Bil in Total Assets for Intel. This yields a strong Cash-to-Assets Ratio of 10.9% (vs. 13.8% for S&P 500)
How Resilient Is INTC Stock During A Downturn?
INTC stock has fared worse than the benchmark S&P 500 index during some of the recent downturns. Worried about the impact of a market crash on INTC stock? Our dashboard How Low Can Intel Stock Go In A Market Crash? has a detailed analysis of how the stock performed during and after previous market crashes.
Inflation Shock (2022)
• INTC stock fell 63.3% from a high of $68.26 on 9 April 2021 to $25.04 on 11 October 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is 50.76 on 27 December 2023, and currently trades at around $22
Covid Pandemic (2020)
• INTC stock fell 34.8% from a high of $68.47 on 24 January 2020 to $44.61 on 16 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock is yet to recover to its pre-Crisis high
Global Financial Crisis (2008)
• INTC stock fell 56.8% from a high of $27.98 on 6 December 2007 to $12.08 on 23 February 2009, vs. a peak-to-trough decline of 56.8% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 26 March 2012
Putting All The Pieces Together: What It Means For INTC Stock
Now, Intel’s recent performance has been poor, with subpar growth and profitability and low downturn resilience. That said, looking ahead, things could get better. Intel’s foundry business, long a weak spot, could turn around in the next two years, with the launch of its advanced 18A process node, which has already attracted customers such as Amazon and Microsoft. The company is well-positioned to benefit from the Trump administration, given its strong U.S. manufacturing base, aligning with expected pro-domestic policy shifts. Valuation is also reasonable with a lower price to sales and price to free cash flow ratio compared to the broader market. Other tailwinds include new PC/server chips (Lunar Lake, Arrow Lake) and growing AI exposure via Gaudi accelerators could also provide some upside to the beaten-down stock.
While Intel stock may be a tricky bet, the Trefis Reinforced Value (RV) Portfolio, has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid- and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.
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