Intel (NASDAQ: INTC) has been on a strong run in 2026, rising around 170% so far this year. However, it’s well off its all-time highs after a sell-off that started once the calendar flipped to July. Intel is off around 30% from its all-time high, but does it deserve to be there?
Investors who bought the stock at the start of the year (or a year ago when the U.S. government first announced its investment in Intel) are still sitting on huge gains. So is now the time to buy the dip, or should investors take profits and find something else? Let’s take a look.
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There are signs of a turnaround starting
Intel has been a struggling business for a while. While it used to be the pinnacle of both semiconductor and manufacturing and processing chips, that’s no longer the case. Intel splits its business into two primary divisions: processors and its foundry business.
The process business is highly exposed to consumer trends, but it also has a data-centric component. Overall, this business unit just did OK during its last quarter, with revenue rising 9% year over year, boosted by data center demand but held back by consumer products.
The big turnaround focus for most investors is Intel’s foundry business. This segment has lost a lot of clients in recent years, with many clients attracted to Taiwan Semiconductor Manufacturing.
However, with a push to increase domestic chip production, Intel was the primary candidate to make it happen. Intel is still working on getting back to its previous heights, but it may have found a new client in Apple, which reportedly agreed to a deal to use Intel’s foundry for some chips.
This is a step in the right direction, but a lot of this turnaround has already been priced into the stock. Intel trades for a jaw-dropping 88 times forward earnings. That’s a very high price for a stock that’s really not growing that fast right now, which means the market has already priced in a major turnaround.
Investors are looking for Intel to return to its 2022-era performance. During that time, it generated nearly $80 billion in revenue while producing nearly $25 billion in profits. Should Intel return to that level, it would trade for about 20 times earnings — a reasonable valuation.
We’re still in the middle of the turnaround, yet the market has already priced in a full revival. I think that makes Intel’s stock a bit risky, as it could result in a major sell-off. I think there are far more attractive AI investments out there, and you may want to consider passing on Intel shares.