Over a one year period, chipmakers Intel (NASDAQ:INTC) and Advanced Micro Devices Inc (NASDAQ:AMD) dipped into negative returns territory, having gone down 52% and 36% respectively. However, when looking at the 6-month timeframe, we see a divergence. Intel stock is up 7% while AMD shares are down nearly 19%.
For long-term value investors, this is the time to pay attention. Over the last few years, Intel shareholders have seen their fair share of bad news coming from Intel, from the botched rollout of 13th and 14th gen CPUs with instability issues, to doubling down on DEI and difficulties in setting up new chip foundries.
Yet, 2025 not only introduced President Trump’s anti-DEI purge, but a new regulatory landscape. Moreover, the new admin seems to be serious about a tariff-driven economy. As the largest US chip manufacturers, this could make both Intel and Qualcomm (NASDAQ:QCOM) more competitive.
Let’s take an overview of other factors that could make INTC stock have a big comeback in 2025, especially against its long-standing competitor Advanced Micro Devices (NASDAQ:AMD).
Is Intel Cancelling DEI?
It takes extraordinary human and financial capital to maintain and deploy cutting-edge technology like microprocessors, integrated circuits, and graphics chips. The balancing act between R&D and pricing semiconductor products against competitors leaves little room for error.
Not to mention the expenditures needed to eventually rank Intel as the 2nd largest global semiconductor manufacturer between TSMC and Samsung (KS:005930).
To then add DEI initiatives into that small room to introduce other criteria than excellence has been perceived as counter productive. Although Intel still has “Global Diversity and Inclusion” on its official website, it is expected the company will move away from this boutique social engineering, following the trail of other businesses.
Notably, DEI-related language is absent from Intel’s FY2024 financial results, delivered on January 30th. But what is Intel doing about its bottom line?
What Can Be Expected from Intel’s CPU Offering?
In 2023’s annual shareholder letter, Intel CEO Pat Gelsinger said the following:
“Intel plans to regain transistor performance and power performance leadership by 2025, and we remain on track to deliver on our goal of five manufacturing technology nodes in four years”
This was a reference to five rails of Intel’s chip process nodes, from Intel 7, 4 and 3 to Intel 20A and 18A (1.8nm). The last is the most advanced node, set for mass volume production in H1 2025. Its power performance leadership is on the table, owing to RibbonFET gate-all-around transistors, combined with PowerVia as the industry-first implementation of power delivery on the back of the chip die (integrated circuit).
This kind of implementation is supposed to drastically speed up processing, while simultaneously lowering energy needs and prolonging battery life. Consumers will get to see Intel’s 18A offering under the name Panther Lake.
In this arena, Intel is going against AMD in the desktop CPU market, specifically against AMD’s implementation of TSMC’s 7nm and 5nm node process. At the same time, Intel is also competing against ARM-based CPUs in the mobile market. According to the latest Counterpoint Research, Intel still holds dominance in the client and server CPU market at 61.6% (the rest is AMD).
Although this is a significant share contraction from Intel’s 80% dominance a decade ago, it bears keeping in mind that AMD’s CPU market share is not continually expanding. Rather, it has its ups and downs, oscillating between 31% and 39% since 2019. Nonetheless, AMD gained a new stable ground, up from the 20% – 25% range from early 2010s up to 2019.
Suffice to say, Intel’s Panther Lake rollout will be the key determiner if AMD gains even higher market share ground by the end of this decade. The CPU issues in previous generations have generated much bad will that will likely affect consumers’ picks in their next upgrade cycles.
This was already evident by the 12% decrease in Intel’s CPU shipments in Q3 2024, vs AMD’s increase of 15% in the same period. Fortunately, if Intel’s GPU rollout is indicative, the company appears to have tightened up its QC.
What Can Be Expected from Intel’s GPU Offering?
When Intel launched its first modern Arc GPU lineup mid-2022, to encroach on the Nvidia/AMD duopoly, it barely made a market dent. By September 2024, Intel’s share in the discrete (dedicated) GPU market slipped to under 1% (down from 2% in the year-ago quarter) as the overall GPU sales increased.
However, Intel’s fairly priced mid-range Battlemage (Arc B580) appears to have restarted Intel’s push in this market. Not only does it match Nvidia’s RTX 4060 in performance, but it exceeded sales expectations.
“Demand for Arc B580 graphics cards is high and many retailers have sold through their initial inventory. We expect weekly inventory replenishments of the Intel Arc B580 Limited Edition graphics card and are working with partners to ensure a steady availability of choices in the market.”
Intel’s spokesperson in December
After Battlemage, Intel should follow up with Celestial on a new Xe3 architecture to compete in the high-performance market against Nvidia (NASDAQ:NVDA) and AMD. Fortunately for Intel, Nvidia appears to have fumbled launches for both RTX 5080 and RTX 5090. Their supply is so low that their price is often 2x the MSRP price, if they can be bought at all.
However, this is also the opening AMD will likely use with the upcoming RX 9000 series launch in Q1 2025. Notably, AMD appears to have given up on highest performing GPUs, so the company now directly competes with Intel in the lower budget categories. In the meantime, Intel still holds dominance in the integrated GPU market at 65%, as of Q3 2024.
In the end, if Nvidia occupies TSMC capacities with AI data center chips, and forgoes its GPU supply to an embarrassing extent, Intel should gain an advantage in the upcoming years with its own foundry capacities for this market.
Intel Earnings and Foundry Ambitions
In the latest earnings for Q4 and FY2024, Intel still showed negative revenue figures under the interim co-CEOs David Zinsner and Michelle Johnston Holthaus (serving as CFO). While the quarterly revenue dropped 7% year-over-year to $14.3 billion, the full-year revenue declined by 2% to $53.1 billion.
Expectedly, the company is still focusing on streamlining and cost reduction. This was somewhat successful, as evident by $500 million decline in R&D and MG&A costs from the year-ago quarter.
In Q3, Intel boosted shareholder confidence by announcing independent subsidiary Intel Foundry. This new division saw annualized revenue of $17.5 billion, down 7% from 2023. As previously mentioned, much is expected from the cutting edge Intel 18A node process. Arizona’s Fab 52 upgrade is underway to make that happen.
And after belated funds from the CHIPS and Science Act, worth $7.86 billion in direct funding, Intel finally received $1.1 billion in Q4 and the same amount again in January.
Overall, Intel lost $19.23 billion in 2024 vs $1.67 billion in 2023.
The Bottom Line
Intel should be viewed as a strategic asset of the United States in the tech sector. Vice President JD Vance affirmed this again at the recent 2025 Paris Artificial Intelligence Action (WA:ACT) Summit:
“The Trump administration will ensure that the most powerful AI systems are built in the US with American-designed and manufactured chips.”
Like Tesla (NASDAQ:TSLA), Intel can expect to be guarded against competitors by President Trump’s tariffs, as the company unrolls foundry capacities. And now that the anti-DEI purge is underway, there are fewer obstacles to make that happen.
Moreover, Intel proved with the Battlemage GPU launch it can compete in the discrete GPU market. The timing for this is just right, as Nvidia is more focused on data center chips instead of its traditional core business. Both AMD and Nvidia are beholden to TSMC’s capacities, which makes Intel the more likely winner in the long run.
For these reasons, the recent INTC stock bump should be viewed as a precursor. At the moment, the average INTC price target is aligned at $21.90 per share. Per WSJ forecasting data, the bottom target is not far, at $18, while the ceiling is at $31 per share.
With these low and high targets, INTC is a relatively safe exposure to the semiconductor sector given Intel’s long-term fundamentals for value investors.
***
Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.