Intel is back in focus after announcing that its next-generation 18A-P manufacturing process has entered initial production. This is an important step in the company's effort to reclaim its leadership in chip-making. The 18A-P process can be thought of as an upgraded blueprint for building faster, more efficient chips — both for Intel's own products and for outside customers.

The update is especially significant because Intel is trying to grow its foundry business and compete more directly with the industry leader, TSMC. There are reports that Google and Nvidia could use Intel to manufacture future chips, and that prospect has boosted investor optimism. With AI driving massive demand for compute, Wall Street expects Intel's data center and AI business to grow nearly 40% year-over-year this quarter.

The Stock's Extraordinary Run

The stock has continued to power higher. Looking at the one-year chart, the low print was 18.97, and from that bottom the rally has run roughly 460%. The backdrop also includes several heavyweight stakeholders: the U.S. government holds a sizable position — described as an $8.9 billion stake (characterized as a stake of nearly 10%) — and Nvidia holds a stake of about 4%, with both having entered around the mid-to-low 20s in terms of the stock price.

The Bearish View: Valuation and "Neiman Marcus" Optimism

The cautious case rests almost entirely on valuation. The optimism baked into Intel right now has become expensive — described memorably as "Neiman Marcus optimism." The analogy captures the feeling of walking into a high-end store that feels more like a museum: everything is beautiful and pristine, but it's so richly priced you're afraid to touch anything for fear of breaking it. In other words, the stock is now priced as a luxury good.

The concern is that Intel needs a lot of good news just to keep the stock where it is right now. The company may genuinely be safer than it has been in a long time, but it's unclear how much of the good news is already priced in and how far the stock has run past its underlying value. Even with good news coming up, the open question is whether it will be good enough to keep the stock at current levels — and there's no confident answer to that.

On hard valuation numbers, Intel trades on a forward price-to-earnings multiple of about 100 times over the next 12 months. That makes it considerably more expensive than AMD and especially Nvidia (which, notably, just turned positive on the session during the discussion). And while the new chip news is positive, Intel is still losing money on its foundry business at this point.

The Bullish View: Customers, Capital, and CPU Pricing

The constructive case points to a cluster of supportive developments:

- Intel is coming out with the new chip and may be trying to get Apple under its wing as a major customer, which would help meaningfully in the near term.
- Google (Alphabet) has already said it will start buying chips from Intel.
- Nvidia has invested $5 billion in Intel (alongside the government's nearly 10% stake) — and despite being a competitor, Nvidia was affectionately dubbed "Big Brother Nvidia."
- SoftBank invested $2.5 billion in the company.

These underlying positive tones are part of a broader effort to broaden out Intel's customer base.

The other major driver behind the stock's parabolic move since around March of this year is CPU pricing, which has gone through the roof, with demand skyrocketing. According to Mercury Research, Intel currently owns about 67% of the CPU market. However, that dominance is being eroded: just four years ago, in the first quarter, Intel held 88% CPU market share, so AMD has been digging into that lead. Adding to the competitive pressure, Nvidia is now getting into the CPU market as well.

The net summary: valuation is genuinely elevated, but it remains a good story — particularly if Intel can land Apple as a major customer.

Trade Idea #1: The Put Calendar Spread (Long Vega, Directional Downside)

The first strategy is built around a key insight: good news doesn't guarantee the stock goes up. There is often a disconnect between news and excitement on one hand, and the actual numbers on the other.

The setup begins with the expected move out to next week, June 26th, of about $14 (rounded). The trade is a two-week put calendar spread, placed for a debit of $2.05:

- Buy the July 10th 105 put
- Sell the June 26th 105 put

The 105 strike sits roughly $15 below where the stock is trading, chosen with the help of the right-hand column on the Thinkorswim platform for strike selection. The position carries about 7.5 deltas, is collecting theta, and is long about 4.5 vega. This combination is deliberate: it provides directional P&L to the downside and long-vega P&L, because even a flood of good news may not keep the stock at current levels.

Breaking down the mechanics: With 23 days to expiration, the trade buys the July 10th weekly 105 put and sells the same strike in the near-term June 26th weekly options (which expire in just over a week). The roughly $2.05 debit is the total risk — about $205 for this downside exposure.

On the risk profile, profitability apexes at or near the 105 strike where the calendar is placed. But the trade enjoys a wide profitable range: even if the stock trades to 110 or down to 100, it stays in the profit zone. The approximate range runs from about $95 on the downside to roughly $117–$118 on the upside.

The rolling advantage: Because the trade is two weeks wide, there is the opportunity to roll the short option and create credits. For reference, the one-week roll from the June 18th to the June 26th weekly options was running over $3.50 on at-the-money puts. So if the stock falls toward 105, the credits collectible on these adjustments really start to explode — potentially taking out a lot of, or even all of, the risk depending on where the stock is and where volatility sits.

The "double bang for your buck": If Intel starts to fall, volatility historically expands. Because this is a long-vega trade, a spike in volatility expands the price of the calendar itself. So a decline helps in two ways at once — the stock moves toward the desired 105 target, and rising volatility lifts the calendar's value.

Trade Idea #2: The Cash-Secured Put (More Passive, Capital Intensive)

The alternative approach is more passive but more capital intensive: a cash-secured put, placed in the shorter-term July 2nd weekly options, by selling the 110 strike put.

The credit collected is the maximum that can be made on the trade — $350 per spread. Collecting that $350 credit on the 110-strike put brings the break-even down to 106.50 on the downside.

The capital-intensive label comes from the risk: there is exposure all the way down to zero if the stock were to fall that far. While not out of the realm of possibility, it's not a high-probability outcome — but if it did happen, the max loss is about $10,650.

The logic of the trade is that it offers a cushion to the downside break-even, and you have to be comfortable owning the shares. If you wouldn't mind buying Intel should it fall from these elevated levels, you sell this put — and even if the stock never drops below the 110 strike, the trade is still profitable.

Comparison to a covered call: The cash-secured put has the same profit profile as a covered call, and like a covered call (where you're long the stock), it carries risk down to zero. The key benefit is the cushion: this structure provides roughly $10–$11 of cushion, meaning the stock can decline and the trade can still be profitable. The great advantage is that you don't enter at 110 — you effectively enter at 106.50.

Managing the position if it goes against you: If the stock trades down to 110 or lower, there are three choices:
1. Take the stock (get assigned), with a break-even of 106.50.
2. Extend duration if the market allows — rolling the short put to another weekly or monthly cycle, which may actually collect additional credits.
3. Close the trade while the market is open if you don't like it and don't want to be assigned should the stock slip below the 110 level.

The recurring caveat remains: with the cash-secured put, you must be prepared to own the shares.

Questions Raised and Answered

- Is Intel safer than it's been? Yes — the company is now viewed as safer than it has been in a long time. The unresolved problem is how much good news is already priced in and how far the stock has run past its value.
- Is the upcoming good news good enough to keep the stock at current levels? This was explicitly left unanswered — there's no confident call on whether the catalysts will sustain the elevated price.
- What happens if the cash-secured put goes to 110 or lower? You can take the stock (break-even 106.50), extend duration by rolling for potential credits, or close the trade entirely.

Bottom Line

The debate distills to a clash between a compelling narrative and a demanding valuation. The bullish story is real — production of 18A-P, the push into foundry, marquee potential customers like Apple, confirmed buying from Google, and large strategic investments from Nvidia, SoftBank, and the U.S. government, all against a backdrop of surging CPU pricing and AI-driven compute demand. The bearish counterweight is equally real — a ~100x forward P/E, a still-unprofitable foundry, eroding CPU market share (down from 88% to 67% in four years), new competition from Nvidia in CPUs, and a roughly 460% rally that may have outrun fundamentals. The two options strategies — a long-vega put calendar spread for defined-risk downside exposure, and a cash-secured put for a cushioned, income-oriented entry — both reflect the same underlying caution: in a stock priced for perfection, good news alone may not be enough to keep it aloft.