What happened

Shares of Intel (NASDAQ:INTC) gained 12.4% in value last month, according to data provided by S&P Global Market Intelligence.

After treading water for much of 2018, Intel stock rebounded in January along with the broader market. In February, the momentum from the positive fourth-quarter earnings report in late January, along with an analyst upgrade, kept the stock moving higher.

A computer chip with the Intel logo printed on the side.

Intel's Programmable Acceleration Card N3000 designed to enable 5G next-generation network solutions. Image source: Intel.

So what

When a company continues to post solid growth rates on the top and bottom lines, and the stock is cheap, sooner or later investors are going to send the stock higher. That seems to be what happened with Intel's last month.

Intel has suffered from a stagnant PC market for several years, but it's successfully shifted its focus to high-growth datacentric markets, like the Internet of Things, cloud computing, and self-driving cars (Mobileye). The stock is up 75% over the last three years as a result of strong operating performance. 

For a stock that continuously trades for less than 12 times earnings, Intel has been posting impressive results. In 2018, revenue increased 13% and earnings per share jumped 32%. 

Investors and some executives at various chip companies have been urging caution about a slowdown in the chip industry in recent months. But Intel's recent results and subsequent stock performance could mean that expectations have gotten too low.

Now what

CEO Bob Swan certainly sounded optimistic on the latest conference call to discuss the fourth-quarter results. "We expect 2019 to be another record year for us as the world's appetite for the analysis, transmission and storage of data continues to grow," Swan said. However, management remains cautious in its outlook given the uncertainties over trade tensions with China.

Even after the recent bounce, the shares still look cheap, trading for a forward P/E of 11.4 and offering a dividend yield of 2.38%.