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After years of being left for dead, Intel is coming to life.
The chipmaker jumped 16 percent yesterday, its biggest gain since the 2020. That surge followed its best week (+24 percent) since January 2000, near the peak of the dotcom bubble. The stock is now above its 200-day moving average for the first time in 10 months, which may suggest its long-term downtrend is ending.
The rebound started on February 10 after reviewers issued positive reports on its new Intel Core Ultra 9 275HX chip. “Shocking performance gains,” said PC World, adding that it “helps redeem Intel’s reputation.” Tom’s Hardware made similar comments.
“The Trump administration will ensure that the most powerful AI systems are built in the U.S. with American designed and manufactured chips,” Vice President J.D. Vance told an audience in Paris the next day. That gave another boost to INTC, which is the largest producer of integrated circuits on American home soil.
The attention increased over the weekend as peers and investors eyed the company for a potential turnaround. The Wall Street Journal reported that Broadcom (AVGO) and Taiwan Semiconductor (TSM) considered acquiring INTC and breaking up its assets. AVGO reportedly wanted its design and marketing operations while TSM would take its foundries.
A separate report from Bloomberg yesterday said Silver Lake Management wanted to invest in INTC’s programmable chip business, Altera.
INTC may appear inexpensive relative to other chip stocks. The company trades for less than 2 times revenue. AVGO trades for 21 times sales and NVDA is valued at 30 times, according to TradeStation Data. INTC also trades for roughly book value, less than 20 percent of the valuation assigned to other chip names like NVDA, AVGO or Qualcomm (QCOM).
Intel (INTC), daily chart, with select patterns and indicators.
Its relative cheapness results from years of poor product development. The company failed to manufacture super-thin 5 nanometer chips, falling behind Asian rivals like TSM and Samsung. INTC had its worst year ever in 2024 (down 60 percent), punctuated by a dramatic selloff last August after revenue missed estimates and management cut 15 percent of staff. Five months later, it was dropped from the Dow Jones Industrial Average.
The recent price move has triggered a surge in options activity. INTC traded more than 2 million contracts yesterday for the first time in at least a decade. Its put-to-call ratio has also steadily declined, which means potentially bullish options increasingly outnumber potentially bearish ones.
INTC’s strength matches a potential trend in 2025 of investors hunting for value in laggards and potential turnarounds. Other big movers include:
Given INTC’s early gains and the Trump Administration’s focus on domestic industry, could traders look for the company to remain active in coming months?
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