A Remarkable Ascent
Few stock stories in recent memory have been as dramatic as Intel's turnaround. Since bottoming out at $18.97 in late July of last year, shares have climbed more than 250%, clearing $70 this week for the first time in over a quarter century. Just this year alone, the stock is up roughly 80%. The rally has been fueled by an almost steady drumbeat of positive news flow: strategic investments from both the U.S. government and Nvidia, a partnership with Tesla involving their terafab operations, collaborations with Google on CPU demand, and growing optimism around Intel's effort to rebuild itself as a world-class foundry.
Yet a rally of this magnitude inevitably raises a critical question: has the price gotten ahead of the underlying business? With earnings on deck, the conversation is shifting away from narrative and toward the actual numbers. The market has spent nine months rewarding the story. Now it wants proof.
What the Numbers Need to Show
Analysts are looking for around $12.33 billion in revenue for the March quarter, paired with earnings of roughly a cent per share. Guidance for the June quarter will be pivotal, with the consensus set at about $13 billion in revenue and 9 cents per share in earnings.
The internal picture is uneven. The client computing group, which houses the PC chip business, is expected to generate just north of $7 billion in revenue — a 7% decline from the year-ago period. The data center segment, by contrast, is projected to bring in about $4.4 billion, representing approximately 8% year-over-year growth. Some areas of the company are accelerating while others are contracting, and investors need to gauge whether the momentum in high-priority segments is real enough to offset the weaker corners of the business.
The Foundry Question
Much of the valuation expansion rests on the promise of Intel's foundry ambitions, and here skepticism is most pointed. Analysts at Wedbush have argued that the stock has "gotten ahead of reality" in its pricing, citing the 18A process node as well as the next-generation 14A node — neither of which has yet proven itself as a competitive technology. For Intel to genuinely pivot its foundry business into a growth engine, it must succeed with 14A and, crucially, attract external customers willing to trust their most advanced silicon to Intel's fabs rather than TSMC's.
RBC has echoed the caution, noting that the stock appears to be trading largely on foundry optimism. Whether that optimism is warranted remains unresolved, and at current valuation levels there is "little margin for error." Both firms still expect a beat in the quarter and better-than-expected guidance, but both are signaling that the market's appetite now extends well beyond those baseline achievements.
Even with these reservations, there is some encouraging ground to stand on. Intel does appear to be attracting customers for its foundry services, and even if its designs lag the industry leader, sheer printing volume can translate into meaningful revenue. The real test is whether 14A arrives as a genuinely superior option to 18A, which has been the foundation of Intel's current foundry narrative.
The AI Bottleneck Dynamic
Another subtlety worth weighing is how AI demand flows through Intel's portfolio. CPUs have become an AI bottleneck — not as acutely as memory chips, which are suffering severe shortages, but meaningfully nonetheless. Server CPU supply is expected to grow, which is good for volume but likely means less pricing power than what memory suppliers currently enjoy. Investors hoping for a pricing-driven windfall similar to what we've seen in memory may need to temper expectations. Growth here will come more from units shipped than from dollar-per-chip expansion.
Playing the Trade
For investors who believe in the longer-term thesis but recognize the near-term fragility, structured options strategies offer a disciplined way to participate. With the stock trading in the high $60s, outright purchase has become expensive, and the implied volatility around earnings is elevated. A long-dated call spread — for instance, the December 60/90 spread priced around $9.85 — offers an alternative. Given that such a spread already carries roughly $7 of intrinsic value, the additional premium required is modest. The trade is capped at $90, which conveniently sits near the more aggressive price targets on the Street. If Intel is trading at $90 by December, such a position pays off handsomely, while capping downside relative to owning the shares outright.
This kind of defined-risk structure is well-suited to a situation where optimism is priced in but execution remains unproven. It allows exposure to continued upside without betting the farm on whether 14A will convince the market it is truly competitive.
The Broader Market Context
Intel's situation does not exist in a vacuum. After a tremendous rally from the lows — one driven by relentless dip-buying — broader markets are near record highs and investors are taking a second look. Headwinds still exist, particularly internationally, where elevated oil prices threaten to slow the global economy. The U.S. economy is somewhat insulated, but a significant enough global slowdown would eventually wash ashore here.
Part of what has fueled this rally is a deeper investor conviction that, over the long term, markets tend higher. That belief has translated into aggressive dip-buying at every opportunity. But not every dip is the same — some are shallow and quickly reclaimed, while others demand patience. Timing them precisely is notoriously difficult, and the pattern we've seen is straightforward: whenever capital is available and prices have pulled back, money comes in to work. Even the Russell 2000, which has lagged much of the leadership, is showing signs of turning positive, suggesting that breadth may be slowly improving beyond the narrow group of winners.
Conclusion
Intel's story is at a pivotal inflection. The narrative phase — partnerships, investments, the rebuild-America-chips story — has done its work, driving a 250%-plus rally off the lows. What comes next depends on execution. If revenue, guidance, and foundry progress confirm the thesis, the rally has room to extend. If the numbers reveal that enthusiasm has outpaced operational reality, the current valuation offers little cushion. The coming quarters will determine whether one of the most dramatic comebacks in semiconductor history is a durable turnaround or a moment of optimism that ran ahead of its skis.