Intel's Recent Share Price Gains: Evaluating Valuation Amid Turnaround Progress

Intel's share price has risen 21% in the past year, with a 20% gain in the last three months. The company's strong annual net income growth and strategic moves, such as shedding noncore businesses and spinning off its automotive business, are driving its turnaround plan. Despite lingering concerns about manufacturing delays and competition, Intel is currently undervalued according to one narrative, with a fair value of $28.47. The SWS DCF model also suggests underpricing, but concerns about competition and past delays remain.

Intel's share price has risen 21% in the past year, with a notable 20% gain in the last three months. This upward trajectory reflects the company's strong annual net income growth and strategic moves, such as shedding noncore businesses and spinning off its automotive business. These actions are part of Intel's comprehensive turnaround plan, which aims to reposition the company as a leader in the semiconductor industry.

The U.S. government's $11.1 billion investment, securing a 9.9% equity stake under the CHIPS Act, is a significant milestone in Intel's turnaround journey. This investment, coupled with Intel's $100+ billion private investment in domestic manufacturing, signals a paradigm shift in how industrial policy and corporate strategy intersect in the AI era [1].

The strategic alignment of Intel's turnaround with geopolitical objectives is evident in the government's focus on reshoring advanced chip production and accelerating AI-specific technological leadership. By funding Intel's 18A process node development and advanced packaging projects, the government aims to close the gap with TSMC in cutting-edge manufacturing while reducing reliance on foreign foundries [2]. This effort is crucial as China's state-backed initiatives threaten to erode U.S. technological superiority.

Intel's 2025 strategic pivot also focuses on financial discipline, technological innovation, and AI-driven growth. The 18A process node, featuring RibbonFET transistors and PowerVia backside power delivery, promises a 30% density improvement and 15% performance-per-watt gain over prior generations [2]. Panther Lake, the first client processor built on 18A, is slated for late 2025 and will be 70% manufactured in-house, significantly reducing costs [3]. While challenges persist, such as low yield rates and competition from TSMC, Intel's strategic moves position it for a long-term rebound.

Despite lingering concerns about manufacturing delays and competition, Intel is currently undervalued according to one narrative, with a fair value of $28.47. The SWS DCF model also suggests underpricing, but concerns about competition and past delays remain [4].

The U.S.-China tech rivalry is fracturing the global semiconductor industry into two camps: state-backed innovation (China) and market-driven resilience (U.S.). While China's "Made in China 2025" strategy has spurred domestic chipmakers like Huawei and DeepSeek, its AI chips still lag behind U.S. counterparts in performance [4]. Conversely, the U.S. is leveraging its industrial policy to create a "friend-shoring" ecosystem, where companies like Intel and TSMC anchor supply chains in allied nations. This bifurcation creates opportunities for investors to hedge against fragmentation by diversifying across Chinese innovators and U.S. leaders [2].

Intel's government-backed revival is not just about reviving a company—it's about redefining the rules of the AI era. By merging public investment with private innovation, the U.S. is betting on a future where semiconductor leadership is inseparable from geopolitical dominance. For investors, the key lies in navigating the asymmetric risks: supporting a strategic national asset while mitigating the uncertainties of regulatory overreach and global supply chain volatility. As the 18A process node and AI-specific chips roll out, the semiconductor landscape will be reshaped—not just by technology, but by the political will to control it.

References:
[1] Intel, Biden-Harris Administration Finalize $7.86 Billion..., [https://newsroom.intel.com/corporate/intel-chips-act]
[2] The U.S. Government's Equity Stake in Intel: A Strategic Bet..., [https://www.ainvest.com/news/government-equity-stake-intel-strategic-bet-semiconductor-sovereignty-2509/]
[3] Intel warns US stake could hurt international sales, future ..., [https://www.reuters.com/world/china/intel-warns-us-stake-could-hurt-international-sales-future-grants-2025-08-25/]
[4] U.S. and Chinese AI Strategies – Competing Global Approaches, [https://www.chinausfocus.com/finance-economy/us-and-chinese-ai-strategies-competing-global-approaches]