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Tech giant Intel (INTC) benefited from the U.S. government taking a 10% stake in the company after it faced significant issues, notably falling behind in the artificial intelligence (AI) race. However, bigger news dropped when it was announced that Nvidia (NVDA) will invest $5 billion in its struggling rival. Through this partnership, Intel will develop custom chips for Nvidia’s AI infrastructure platform for data centers.
Now, Nvidia’s investment has made the U.S. government’s stake much more attractive. The approximately $9 billion stake has now increased in value to more than $13 billion, with the government is up about 50%, or $4.4 billion, through Sept. 18. The deal might reshape the computer semiconductor business. With that in mind, should you buy INTC stock now?
About Intel Stock
Headquartered in Santa Clara, California, Intel is a global leader in designing and manufacturing advanced semiconductor products, including central processing units (CPUs) and AI-focused chips. In 2025, Intel is focusing on streamlining its operations by reshaping its workforce.
The company aims to enhance efficiency and accelerate innovation, focusing on core areas such as AI technology and custom chip manufacturing. Intel is also simplifying its management structure to foster quicker decision-making and empower engineering talent.
Through these efforts, Intel aims to enhance its competitive position and drive growth in the evolving semiconductor market, while preparing for future technological advancements. Intel has a market capitalization of $125.9 billion.
Over the past 52 weeks, Intel’s stock has performed well, gaining 30%. INTC stock is also up 46% year-to-date (YTD). Following the news of the Nvidia investment, the stock reached a 52-week high of $32.38 on Sept. 18, although shares are now down 9% from this high.
INTC stock is trading at a relatively cheap valuation. Its price-to-sales (P/S) ratio sits at 2.44 times, which is lower than the industry average.
Intel’s Q2 Earnings Missed Expectations
On July 24, Intel reported its second-quarter results for fiscal 2025. Revenues came in flat year-over-year (YOY) at $12.86 billion, which was higher than the $11.87 billion that Wall Street analysts had expected. Intel CFO David Zinsner made it clear that the company is working to reduce its operating costs, bolster capital efficiency, and better monetize non-core assets.
Non-GAAP gross margin, on the other hand, decreased from 38.7% in Q2 2024 to 29.7% in Q2 2025. The company’s non-GAAP bottom line declined over the same period from earnings of $0.02 per share to a loss of $0.10 per share. Wall Street analysts, on the other hand, had expected earnings of $0.01 per share. Thus, the company missed Street bottom-line estimates by a wide margin.
For the third quarter, Intel expects revenue to be in the range of $12.6 billion to $13.6 billion, while its bottom line is likely to remain negative with a projected GAAP attributable loss per share of $0.24. The company’s non-GAAP gross margin for Q3 is expected to be 36%.
Wall Street analysts are still optimistic about Intel’s ability to reduce its bottom-line losses. They expect the company’s loss per share to narrow by 81% YOY to $0.12 for the third quarter. For the current fiscal year, loss per share is projected to decrease by 53% annually to $0.40, followed by a 137% improvement to an EPS of $0.15 in the next fiscal year.
What Do Analysts Think About INTC Stock?
Wall Street analysts are tepid when it comes to INTC stock now, with mixed reactions about the company’s latest steps. On the one hand, analysts at Benchmark upgraded Intel to a “Buy,” setting a price target of $43. Benchmark believes that the Nvidia partnership might restore confidence in Intel’s product roadmap and attract new customers for its foundry business.
On the other hand, UBS analyst Timothy Arcuri maintained a “Hold” rating on Intel, while giving a price target of $35. Meanwhile, Barclays maintained an “Equalweight” rating on the stock, while raising the price target from $19 to $25. Barclays analysts cited the company’s integration of x86 with NVLink, which might expand the company’s data center opportunities.
Citi analyst Christopher Danely downgraded INTC stock from “Neutral” to “Sell." However, the analyst increased his price target from $24 to $29. Danely wrote, “We expect minimal improvement for Intel as better graphics won't make Intel's CPU better than AMD's given the processor is the main performance driver.”
Wall Street analysts are taking a cautious stance on Intel, with a consensus “Hold” rating overall. Of the 40 analysts rating INTC stock, two analysts have a “Strong Buy” rating, a majority of 32 analysts play it safe with a “Hold” rating, and six analysts give a “Strong Sell” rating. The consensus price target of $24.96 represents 15% potential downside from current levels.
Key Takeaways
While the government and Nvidia are taking stakes in this Silicon Valley giant, which is giving INTC stock a boost, analysts remain somewhat tepid about shares. Hence, it might be wise for investors to wait for a better entry point in the stock.
