Intel Hits a 52-Week High: Time to Buy?
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Why did Intel hit a fresh 52-week high and is the rally sustainable?
Intel sets new highs. Is the climb just beginning? You're listening to Motley Fool Money.
Welcome, Fools! I'm your host, Tim Beyers, and with me are two old friends, Rick Munarriz and Asit Sharma. I hope you're both fully caffeinated because we've got a pretty caffeinated stock to talk about today, and that is Intel, ticker INTC. As of the time I wrote these notes on Friday, the stock had hit a fresh 52-week high of $45.67 a share. Is this the beginning of an extended rally that will last years, or is this time to cash in on a burst of enthusiasm and move capital into more proven chip stocks? I think these are really interesting questions, and we're going to tackle both of them. We are then going to get a bit philosophical, because we're going to have another episode of Mindset Monday, which is perfect for Asit and Rick.
But first, we have to talk about Intel. So, Rick, I'm going to start with you here. Donald Trump, the President of the United States, had a meeting with Intel CEO Lee Bhutan, and he was very excited about this meeting. He said, I just had a great meeting. He put this out on his social media platform. saying, I just had a meeting with a very successful Intel CEO, Lee Bhutan. Intel just launched its first sub-2 nanometer CPU processor design built and packaged right here in the USA. I think we can say with some confidence here, Rick, that the President isn't making any serious technical statements. But what we do know is that he does seem to be excited about putting federal funds and federal backing behind Intel.
In particular, there is one Defense Department initiative underway that will allow Intel to get a serious amount of money, billions of dollars, for manufacturing for the federal government. Do you think this enthusiasm for Intel is warranted? How are you feeling about Intel knowing that it's hit a 52-week high?
Sometimes you see a stock start to move up before the fundamentals get there. And with Intel, you see that. 2025 will be the fourth consecutive year of declining revenue. Intel is still not profitable on a reported basis. It's not generating positive free cash flow, something that analysts don't see changing until 2027. But what you mentioned, what happened in August when the U.S. said, all right, we're going to put $8.9 billion for a 9.9% stake in August, that's basically now worth more than $20 billion. So, you, me, and Asit, we each owed about $60, if my math is correct, $60 worth of Intel just as being a U.S. citizen. You have this case where there is that enthusiasm. Obviously, that's where the White House is coming from.
But it is the kind of thing where now it has to prove it to me. Show me that you can do this. And I think that's the whole thing. Intel is doing a lot of right things. It had a great CES last week, a lot of buzz, but the results aren't there yet. And that's, I think, what we need to wait for to see if the run-up that the stock has had, a monstrous run-up over the past year, is warranted.
Asit, let's talk about at least part of the technical stuff that President Trump is talking about here. Intel, in the United States, is planning to bring online plants that will provide chipmaking in two distinct but very advanced processes, one called 18A, one called 14A. And the president did point out correctly that these are sub-2 nanometer. 18A is 1.8 nanometer. 14A is 1.4 nanometer. This is really small. And the smaller the chip, the more power efficient it can be. Sometimes you can put more of these chips together on a wafer so you can create a more powerful chip. The implication here is that these processes are going to be highly useful for things like wait for it. AI, Asit. How big a deal is this, do you think, making essentially highly advanced chips here on U.S.
shores? How much credit should we give Intel for this, knowing that it's not done yet, but they are working on it?
Let's give Intel the credit upfront for working on it. The USC did its most advanced chip-making capabilities to Taiwan years ago. Intel itself was the manufacturer at scale of our best technology when it came to chips, and really just got off track in so many different ways.
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Chapters
4 chapters
1
Why did Intel hit a fresh 52-week high and is the rally sustainable?
0:05–5:52
2
How did the White House meeting with Intel’s CEO influence investor sentiment?
5:52–9:35
3
What federal backing and DoD initiatives could financially support Intel?
9:35–16:36
4
What do 18A and 14A chip processes mean and why are they important for AI?
16:36–20:22