Key Takeaways:
- Foundry Progress: Intel shipped its first products on Intel 18A, the most advanced U.S.-made semiconductor process.
- Price Projection: Based on current execution, INTC stock could reach $85 by December 2028.
- Potential Gains: This target implies a total return of 68% from the current price of $50.59.
- Annual Return: Investors could see roughly 20% growth over the next 2.9 years.
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Intel Corporation (INTC) delivered fourth-quarter 2025 results that exceeded guidance across revenue, gross margin, and earnings per share. The company posted revenue of $13.7 billion despite significant supply constraints that limited its ability to fully capture demand.
CEO Lip-Bu Tan emphasized the company’s transformation over the past 10 months, highlighting a simplified organizational structure, strengthened balance sheet, and deepened customer relationships.
The opportunity ahead is substantial as AI-driven demand expands across client devices, data centers, networking, and edge computing.
Intel faces near-term headwinds from manufacturing constraints but demonstrated progress on critical strategic priorities.
- The company launched Core Ultra Series 3 on Intel 18A ahead of schedule, delivering three SKUs instead of the planned one, with performance reviews showing up to 27 hours of battery life and a 70% generation-over-generation graphics performance improvement.
- Traditional server demand remains robust, with DCAI revenue growing 15% sequentially to $4.7 billion—the fastest sequential growth this decade.
- Intel’s custom ASIC business reached an annualized revenue run rate exceeding $1 billion in Q4, growing more than 50% for the full year.
- This provides a foundation to pursue the $100 billion TAM opportunity as customers increasingly seek purpose-built silicon for AI, networking, and cloud workloads.
- Management noted the growing role of CPUs in AI infrastructure as workloads shift from human-prompted requests to persistent computer-to-computer interactions that require significant orchestration capacity.
On the foundry side, Intel is the only manufacturer shipping gate-all-around transistors with backside power for revenue.
The company expects customer decisions on Intel 14A to begin in the second half of 2026, with risk production starting late 2027 and volume production in 2028.
Advanced packaging capabilities, particularly EMIB-T technology, are generating customer interest well above initial expectations.
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What the Model Says for Intel Stock
We analyzed Intel’s strategic transformation into a vertically integrated IDM 2.0 model that combines product leadership with foundry capabilities.
- The company benefits from structural AI demand across its entire portfolio.
- CFO David Zinsner expects supply constraints to ease beginning in Q2 2026, with improvements continuing through the year.
- Management targets $16 billion in operating expenses for 2026, down from $16.5 billion in 2025, while planning capital expenditures flat to slightly down.
Using a 5.4% annual revenue growth forecast and 12.7% operating margins, our model projects the stock price will reach $85 in 2.9 years. This assumes a 78.4x price-to-earnings multiple.
That represents compression from Intel’s historical P/E averages of 93.7x (one year) and 39.3x (five years).
The elevated recent multiples reflect losses and restructuring costs, but the forward multiple acknowledges execution risks as Intel ramps new manufacturing nodes and pursues foundry customers.
The real value lies in capturing AI-driven demand across client, data center, and custom silicon while establishing a trusted U.S. foundry capable of competing at advanced nodes.
Our Valuation Assumptions
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Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for INTC stock:
1. Revenue Growth: 5.4%
Intel’s growth centers on AI infrastructure expansion and manufacturing execution. The company delivered strong sequential growth in Q4 despite supply constraints, with AI PC units up 16% and data center revenue up 15%.
Mobile data consumption and inference workloads are driving CPU demand as hyperscalers expand traditional server capacity alongside AI accelerators. Intel expects above-seasonal revenue performance through 2026 as supply improves.
The custom ASIC business provides incremental growth as customers build purpose-built solutions, while foundry revenue will scale meaningfully as 14A customer commitments materialize in late 2026 and 2027.
2. Operating margins: 12.7%
Intel targets continued cost discipline with $16 billion in operating expenses for 2026. The company reduced OpEx 15% in 2025 by eliminating bureaucracy and improving execution.
Gross margins face near-term pressure from ramp-up costs for Intel 18A and product mix, with Q1 2026 guidance at 34.5%. Management is focused on yield improvements and throughput gains that don’t require incremental capital, which should support margin expansion as volumes scale.
3. Exit P/E Multiple: 78.4x
The market values Intel at 104.9x earnings currently. We assume the P/E will compress to 78.4x over our forecast period as the company demonstrates consistent execution and returns to profitability growth.
Near-term uncertainty from supply constraints and foundry investment requirements weighs on the multiple. As Intel proves manufacturing competitiveness with 18A and 14A while capturing data center growth and foundry wins, the company should command a premium to historical averages.
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What Happens If Things Go Better or Worse?
Manufacturing execution and customer adoption drive Intel’s range of outcomes. Here’s how the stock might perform under different scenarios through December 2030:
- Low Case: If revenue growth moderates to 4.9% and net income margins compress to 9.1%, investors still see an 89% total return (14% annually)
- Mid Case: With 5.4% growth and 10.0% margins, we expect a total return of 141% (20% annually)
- High Case: If AI acceleration drives 5.9% revenue growth while Intel achieves 10.6% margins, returns could hit 194% total (25% annually)
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The range reflects execution on foundry customer wins, yield improvements on advanced nodes, and market share dynamics in the client and data center segments.
In the bear case, 18A yields disappointment, or foundry customers delay commitments.
In the bull case, Intel secures major 14A design wins ahead of schedule while data center demand exceeds expectations and advanced packaging revenue scales faster than anticipated.
How Much Upside Does Intel Stock Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
