Can Intel Keep Winning After Its Stunning 2025 Rebound?

For a long time now, Intel has been the underdog in the ruthless battle for AI supremacy. With Nvidia and AMD stunning the market with their enormous AI-influenced growth, Intel was left to fix its image for years.

Then 2025 arrived, which became the year where Intel shares increased and almost doubled. This gave the long suffering investors a reward after an exhausting period of tripping in the stock market.

This recovery has brought a change. Rather than doubting Intel’s position in the market, investors want to know if the upturn was a single event in order to overcome the slump, or was it the start of a turning point in the region.

With 2026 being a major year, the ability of Intel to turn the wave of change into a sustainable progress will be watched closely.

From $20 to $40

Not only was Intel’s revival remarkable, but so was its timing and magnitude. The stock rose from approximately $20 to $40 within a year, and the largest part of that increase was recorded in the last four months.

This sudden rise was a clear indication that investors were beginning to reshape their opinion of the market, where they started to think about the long-term strategy of Intel rather than just its past mistakes.

The main reason for the support was the foundry business of Intel. Unlike most chip developers that depend largely on outsourcing to third-party manufacturers, Intel is determined to manufacture a large fraction of the semiconductors by itself.

After Lip-Bu Tan became the CEO, the feeling emerged that Intel would be able to operate more authoritatively, and also more competitively in the AI market.

Valuation Raises Red Flags

As the rally was striking, it also pushed Intel’s valuation to levels that were quite uncomfortable. The company’s price-to-earnings ratio, which is based on the trailing earnings ratio, sits above 700 (727.25x). This is far higher than even Nvidia’s already high multiple.

This may indicate that a big part of the positive sentiment of Intel’s recovery is already reflected in the current stock price. The valuation makes it hard to expect a drastic price increase of 100% soon.

After all, the long-term projections of Intel seem to be getting brighter, but the stock might take a while to consolidate and hold the previous year’s gains before it can fly again.

Major Cost Cutting Reveals Something

Intel’s financial results tell a story that is neither very loud nor very quiet, but is a significant one. The company has initiated major cost cutting, which indicates a new approach of operational discipline under the new leadership.

For the quarter that ended on 27^th September 2025, Intel had $4.5 billion in operating costs, which is a sharp drop from more than $11 billion in the same period last year.

The cost cuts affected all areas of the company including research and development, marketing, and administration. The impact was so large that Intel moved from a huge net loss in the previous year’s quarter to over $4 billion in net income, although revenue grew only modestly.

The point was obvious that Intel does not need to have explosive sales growth in order to drive up its profits if it continues to cut down on its expenses.

Execution Is More Important Than Hype in 2026

The hype surrounding Intel at CES 2026, partly contributed to the company’s stock price that briefly exceeded $43 in early 2026. Along with the announcement of new Core Ultra Series processors built on its 18A manufacturing process, the company also claimed to have a major increase from its Panther Lake AI chips.

The announcements were very much celebrated, but it also brought a risk to the forefront. There is a risk that if the hype is not accompanied by actual results, it can die out quickly.

In a very noisy market where Nvidia, AMD, and Taiwan Semiconductor have all been making bold claims, Intel cannot just rely on its showy demos to be heard. As investors will focus more on sales growth, margin improvement, and foundry adoption, and not on marketing videos or ambitious projections.

Bottom Line

The real scenario of Intel’s turnaround is there, but the expectations should be kept at a lower level. Intel has made progress in restructuring its operations and positioning itself for the AI era, but competition is still tough and valuation limits cannot be disregarded so easily.

The doubling of the stock price that was experienced last year is very unlikely to happen again, unless Intel provides clear and sustainable growth in earnings.

A more realistic outlook for 2026 would be to expect a bit of volatile progress as well, which could lead to moderate earnings rather than another incredible rise. Also, the case for the shareholders is not only about complete hope anymore, but of whether or not Intel can constantly convert its strategic promises into revenues.