Intel Corporation (NASDAQ: INTC) saw its shares climb 1.6% on Monday, closing at $22.34, marking a bright spot in an otherwise difficult period for the semiconductor giant. This uptick adds to a modest rally that has lifted Intel’s stock by over 6% in the past week. Yet, despite this short-term momentum, the company faces significant long-term uncertainties that continue to weigh on investor confidence.

Why Intel’s Chip Empire Is Losing Ground So Fast?

Intel, once the undisputed leader in the global chip market, is now navigating a complex transformation. Over the past year, its stock has plunged approximately 64%, and over five years, it has lost about 68% of its value. This decline reflects Intel’s struggles to keep pace with competitors like AMD, NVIDIA, and Taiwan’s TSMC, who have outpaced Intel in innovation and manufacturing technology.

The company’s foundry business, a key part of its turnaround strategy, remains unprofitable and lags at least two years behind TSMC in process technology. Closing this gap demands massive investments and flawless execution over multiple product cycles, which remains uncertain.

Massive Losses and New Leadership: Can Intel Bounce Back?

In 2024, Intel ended up with a massive $18.8 billion net loss, and harder economic times meant shrinking profit margins too. The enthusiasm about the company’s future has grown with Lip-Bu Tan as CEO due to his background in the semiconductor field. Yet, Intel’s plan for recovery is still at a very early stage, and experts disagree on how the company will manage continued success. However, the CEO stated: 

“We need to build on this progress, and it won’t be easy. We are navigating an increasingly volatile and uncertain macroeconomic environment, which is reflected in our Q2 outlook. On top of that, there are many areas where we must improve. We need to confront our challenges head-on and take swift actions to get back on track”. 

In line with these actions, Intel is reducing its non-GAAP operating expense target to approximately $17 billion in 2025, down from its previously stated goal of $17.5 billion, and is now targeting $16 billion in 2026. In addition, Earnings estimates for Intel for 2025 have moved down 40.8% to 29 cents over the past year, while the same for 2026 has declined 31.2% to 77 cents. The negative estimate revision depicts bearish sentiments for the stock.

Competitive and Market Challenges

Intel’s market share in microprocessors dropped to 65.3% in early 2025, the lowest since 2002, underscoring the intense competition it faces. Rivals like NVIDIA have surged ahead, especially in the AI chip segment, with products like the H100 and Blackwell GPUs dominating the market. Intel’s slower AI chip development has put it at a disadvantage in this high-growth area.

Additionally, geopolitical factors complicate Intel’s outlook. China, accounting for nearly 29% of Intel’s 2024 revenue, is aggressively pushing to replace foreign-made chips with domestic alternatives by 2027. This move, coupled with tightened US export restrictions, threatens Intel’s access to a critical market and intensifies competitive pressures.

What Investors Must Watch: What Lies Ahead for Intel?

Intel will only be successful if it can carry out its turnaround strategy as planned. Important areas are delivering new goods on time, advancing manufacturing, and ensuring presence in the AI and high-level chip markets. The company’s earnings report at the end of July 2025 is important, since investors will assess the progress in these areas.

Although the recent gains and the 2.57% dividend are appealing, the future is still filled with problems for the stock. The analysts rated Intel “Hold” and assigned the company’s average twelve-month price target of $21.57. The highest point experts expect INTC to reach is $28.00, while its lowest price target is $14.00. It will be challenging for the company to regain full investor confidence because it has to deal with organizational problems and strong competition.

Author’s opinion: 

Intel’s recent gains offer a flicker of hope, but the company’s deep-rooted challenges and fierce competition mean that investors should remain cautious. The turnaround will require sustained innovation and execution over several years to regain its former dominance.