Shares of Intel (INTC) have trailed the broader markets by a significant margin in recent years. In fact, Intel stock touched an all-time high during the dot-com boom and has burnt investor wealth for over two decades. Valued at a market capitalization of $94 billion, Intel stock is down 66% in the last five years and has slumped 55% in the past 12 months. 

Last Friday, Intel shares rose in pre-market trading fueled by takeover speculation. A report from SemiAccurate suggested the chip giant could be an acquisition target as it faces intense competition in the semiconductor segment. 

Let’s see if Intel stock is a “Buy,” “Sell,” or “Hold” in January 2025. 

How Did Intel Perform in Q3 2024?

Intel designs and manufactures computer products and technologies. Its core business spans multiple segments, producing computing components like CPUs, chipsets, and system-on-chip packages. Intel’s portfolio extends beyond traditional computing into growth markets, including artificial intelligence, autonomous driving through its stake in Mobileye (MBLY), and cloud computing solutions. It serves various customers, from equipment manufacturers to cloud service providers, while investing in emerging technologies through strategic partnerships. 

In the third quarter of 2024, Intel reported revenue of $13.3 billion, above its initial guidance. However, its gross margins fell to 15% from 42.5% in the year-ago period. Due to falling margins and rising costs, Intel reported an operating loss of $9 billion in Q3 and a net loss of $16.6 billion, dramatically worse than net income of $300 million in Q3 2023. 

Intel disclosed plans in August to slash 15% of its workforce to lower costs. The company is taking bold steps to streamline operations and aims to reduce its cost base by $10 billion by 2025. 

Notably, Intel Foundry secured new design wins in Q3, which included a significant deal with Amazon Web Services (AMZN). Further, the AI PC push is gaining momentum as Intel expects to ship more than 100 million units this year. 

Is Intel Stock Undervalued?

Intel continues to lose market share to peers such as Nvidia (NVDA) and Advanced Micro Devices (AMD). However, Intel is making a strategic pivot that could prove transformative. Intel emphasized investing up to $100 billion over five years to enhance its semiconductor manufacturing capabilities. Intel’s foundry business is already showing promise, earning $4.4 billion in Q3 2024. 

According to consensus estimates, Intel is forecast to improve its adjusted earnings per share to $1.70 in 2026, up from a projected loss per share of $0.14 in 2024. So, priced at 11.5 times forward earnings, INTC stock is not too expensive if its growth can sustain this momentum. 

Out of the 37 analysts covering INTC stock, one recommends “Strong Buy,” 30 recommend “Hold,” one recommends “Moderate Sell,” and five recommend “Strong Sell.” The tech stock’s average target price is $25.94, indicating upside potential of 19% from current levels. 

Intel is playing the long game here and clearing the deck for a significant turnaround. The company’s investments in next-generation technology and strategic moves in AI and foundry services could position it for more substantial returns in 2025 and beyond.