Certainly, there are winners and also-rans in the hyper-competitive world of artificial intelligence (AI) chips. Some chip stock traders feel that Intel (NASDAQ:INTC) needs to catch up to rivals NVIDIA (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD).
However, 2025 ushered in a surprising turnaround for Intel and for INTC stock. After a rough start to the year for Intel, the chipmaker’s shareholders enjoyed a windfall that hardly anyone anticipated.
Indeed, with Intel practically doubling in 2025, it’s now a question of whether this was a fluke or a sustainable uptrend. No matter how you slice it, 2026 will be a crucial year for Intel as the once maligned processor producer attempts to cement its comeback kid status.
From $20 to $40 in 12 Months
Give or take a few dollars and cents, INTC stock advanced from $20 to $40 in 2026. Interestingly, most of the upside movement occurred during the final four months of the year.
At long last, the market came to appreciate Intel’s foundry business, in which the company will produce semiconductors rather than just design them. Some people don’t realize that many chip companies outsource part or all of the production process to other businesses, such as Taiwan Semiconductor (NYSE:TSM).
With Lip-Bu Tan having taken over Intel’s CEO position from Pat Gelsinger, investors had renewed hope for the company. Maybe Intel could compete successfully in a fierce AI chip market, after all.
That said, it may be difficult to justify INTC stock roughly doubling in 2025. Alarmingly, Intel’s trailing 12-month price-to-earnings (P/E) ratio stands at a lofty 727.25x.
Even market darling NVIDIA’s P/E ratio isn’t as high as that. Just based on that concern, I’m choosing not to make any large Intel stock purchases until the share price “consolidates” (goes sideways) and digests 2025’s gains for a while.
Leaner Is Better for Intel
Just because I’m not expecting another 100% move in INTC stock, this doesn’t mean I’m pessimistic. I’m actually bullish because Intel’s foundry business could thrive amid robust AI chip demand in 2026.
Plus, there’s an important detail in Intel’s most recently released quarterly financial filing that some folks missed. In particular, the numbers suggest that Intel, under the current CEO’s leadership, is cutting costs to become leaner.
Here’s the evidence. In the three months ended September 27, 2025, Intel’s operating expenses totaled $4.535 billion. If that sounds like a big figure, bear in mind that in the year-earlier quarter, Intel reported $11.054 billion worth of operating expenses.
Remember: being competitive doesn’t only mean generating higher revenue. It also means spending less money. On that topic, in the three months ended September 27, 2025, Intel spent less money than it did in the year-earlier period on research and development, marketing, general, and administrative expenditures.
Consequently, Intel went from a $16.989 billion net loss in the year-earlier quarter to $4.27 billion in net income for the three months ended September 27, 2025. Furthermore, this occurred even though Intel only reported a moderate year-over-year increase in revenue.
Personally, I’d like to see Intel continue this cost-reduction pattern throughout the new year. Going forward, Intel’s shareholders should monitor the company’s financial reports for improvements in revenue, operating expenses, and net income; the next earnings report should be released in just a few weeks.
Don’t Rely Too Much on Hype
It was, without a doubt, exciting to see INTC stock jump to $43 on January 7, 2026. Evidently, enthusiasm about Intel’s participation in the CES 2026 technology conference drove this share-price rally.
That’s all well and good, but don’t assume that the recent hype surrounding Intel will necessarily translate to another stock-price double. Again, check Intel’s P/E ratio and consider how hype can fade rapidly in this short-attention-span market.
Here’s what concerned me the most. In a press release, Intel touted its Intel Core Ultra Series 3 processors as “the first compute platform built on Intel 18A – the most advanced semiconductor process ever developed and manufactured in the United States.”
In a separate press kit release, Intel bragged in a video about the “60% faster CPU speeds” of its Panther Lake AI chips. Another video showcased “healthcare humanoid” robots powered by Intel chips; frankly, I found the robots to be more humorous-looking than awe-inspiring.
For the remainder of the year, Intel still has a lot of proving to do. NVIDIA, AMD, and Taiwan Semiconductor will also hype up their AI-enhanced products.
The proof, or lack thereof, will be in the sales and profits, not in the hyped-up product rollouts. The data remains to be seen, and realistic investors should expect Intel stock to chop around and perhaps gain 30% in 2026 rather than an ultra-optimistic 100%.