Is Intel’s Stock Undervalued in the AI Boom?

Back in the day Intel was roaring with each new chip launch, chasing competition away, and flaunting manufacturing strength. But somewhere in between TikTok fevers and GPU gold rushes, Intel began to become tardy. Once a semiconductor royalty, Intel now suffers in the shadow of competitors such as Nvidia, AMD, and Taiwan Semiconductor. 

Once the company that was admired for its manufacturing capabilities and super-dominant CPU lineup, the technology giant has not been able to keep up with the age of artificial intelligence and sophisticated chip design. Factory blunders, competitive setbacks, and executive failure eroded its market capitalization and investor faith.

Intel’s Resilience

The firm’s latest Q2 earnings provided a ray of hope to investors. Intel posted $12.9 billion in revenue, which surpassed expectations by almost $1 billion and remained stable year over year. It was fueled by the success of its Client Computing Group (CCG) and Data Center and AI (DCAI) groups. 

As its Foundry business fell 5% sequentially to $4.4 billion, Intel is investing heavily in its 18A process node, which is flaunted as the most innovative chip making technology the company has endeavored in years. CEO Lip-Bu Tan has laid out that Intel’s 18A node will support its next three generations of client and server CPUs, beginning with Panther Lake, which is due by the end of the year. 

Later on, Intel also hopes to turn this technology into a strong foundry operation for outside customers.

Tan also stressed on a more disciplined strategy this time. Intel is bringing the tough lessons of previous missteps to bear on developing its next-gen 14A node, with a particular emphasis on yield reliability, client relationships, and economic returns. Intel’s vigilant capex projection of $8–11 billion for 2025 reflects this new era of capital efficiency. 

Even after reporting an adjusted loss of $0.10 per share in Q2, they are expected to return to profitability next year, with EPS expected to increase 445% by 2026.

AI Gathering Strength

Even though it was late into the AI race, Intel is now going bolder in order to catch up. In Q2, it launched new AI PCs based on Arc GPUs with OEM partners for inference and professional workloads. Its Xeon 6 chips are being set up to tackle the demanding AI loads in data centers. Most importantly, Intel has recognized the reason behind one of its greatest historical instability, which is its software. 

Tan accepted that the company didn’t offer complete system-level and software solutions in the past. To overcome that weakness, Intel is now creating a full-stack AI platform across middleware, developer tools, and edge-optimized frameworks for inference, agentic AI, and edge applications.

Wall Street on the Fence

Intel’s stock according to Wall Street is still unenthusiastic and overall on Hold. Of the 39 analysts following the company, 33 say “Hold,” five say “Strong Sell,” and only one says it’s a “Strong Buy.” With the stock trading at $22.99, it sits right at the average price target. But the highest estimate of $62, means 204% upside if Intel’s recovery plan works.

Intel’s not the leader in AI yet, but it’s no longer on the sidelines. With promising new architectures, prudent capital discipline, and a strategic pivot towards full-stack AI solutions, Intel is indicating life that long-term investors should pay attention to. 

The journey forward is bumpy, but if Intel can deliver on its grand ambitions, its stock may no longer be merely a Hold, it could be an underground AI winner in the making. Intel is not simply repairing old chips, rather it’s modifying itself for a post Nvidia era.

Intel’s tale is no longer about holding on to the throne, rather it’s about fighting back for relevance in an AI-dominated future. It’s not swift, and it’s certainly not winning popularity contests on Wall Street, but it may well be constructing something more profound, which is a robust, diversified, AI-enhanced platform. 

As Nvidia keeps grabbing headlines and leading benchmarks, Intel’s redemption story is playing out quietly behind layers of strategy, humility, and slowed but intentional innovation. Taking a bet on Intel today is not a wager on quick hits, it’s a patient conviction in heritage and the long game. If it pays off, the potential returns could be anything but trivial.