**A Giant Stumbles: Can Intel Regain Its Footing?**
In the span of just five years, Intel, the world’s largest producer of x86 central processing units (CPUs) for PCs and servers, has seen its market value plummet by more than half. The company’s struggles can be attributed to a combination of production delays, chip shortages, and strategic missteps under different CEOs. As Intel’s stock trades at its lowest point in over a decade, the question on everyone’s mind is: can the company turn things around?
For decades, Intel dominated the chipmaking industry, producing the world’s smallest, densest, and most powerful x86 CPUs. However, as the industry shifted towards outsourcing production to third-party foundries, Intel refused to follow suit, choosing instead to manufacture its own chips. This decision proved costly, as the company fell behind its competitors, Taiwan Semiconductor Manufacturing (TSMC) and Samsung, in the “process race” to manufacture smaller and denser chips.
As a result, Intel’s x86 market share plummeted from 82.2% to 62.8% between 2016 and 2024, according to PassMark Software. Meanwhile, Advanced Micro Devices (AMD) saw its share nearly double from 17.8% to 33.2% during the same period. Intel also missed out on two major technological shifts: the rise of mobile chips and the growing importance of discrete graphics processing units (GPUs) for artificial intelligence (AI) applications.
The company’s turnaround efforts have been hindered by inconsistent leadership, with three CEOs taking the reins in recent years. Each CEO has brought a different vision, from diversifying beyond PCs and server CPUs to prioritizing cost-cutting and big buybacks. The current CEO, Pat Gelsinger, has vowed to upgrade Intel’s foundries and catch up to TSMC and Samsung, but the company’s progress has been slow.
Intel’s financials paint a bleak picture, with revenue falling from $70.8 billion in 2018 to $54.2 billion in 2023. Earnings per share (EPS) have also taken a hit, plummeting from $4.48 to just $0.40. The company suspended its dividend earlier this year, and analysts expect revenue to grow at a compound annual growth rate (CAGR) of 4% and EPS to have a CAGR of 38%.
Despite these challenges, Intel’s stock doesn’t appear to be a bargain just yet. At $22.50, it trades at 113 times next year’s earnings and 24 times its 2026 earnings, significantly higher than its competitors AMD and Nvidia. Until Intel provides more clarity on its turnaround plans and demonstrates meaningful progress, it may be wise to approach with caution.
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