Shares of semiconductor giant Intel (INTC 0.58%) rose 90.1% in 2023, according to data from S&P Global Market Intelligence. The stock started last year from a bargain-bin low amid a shaky economy and intense competition. On top of that, many Intel investors weren't entirely comfortable with the company's new business strategy.

But Intel went from strength to strength in 2023, posting robust financial results all year while the troubles of yesteryear faded out. And, of course, the ongoing artificial intelligence (AI) boom didn't hurt Intel at all.

A challenging 2022 set the stage for Intel's 2023 comeback

2022 was a painful year for the chip titan. The shortage in semiconductor manufacturing capacity that started in 2021 was still raging. The global economy suffered the worst portion of the recent inflation crisis, limiting the appetite for high-end electronics with Intel components.

Arch rival Advanced Micro Devices (AMD -1.96%) was pulling all the right levers in that challenging market, stealing market share from Intel in key sectors such as desktops and data center servers. So, Intel's financial results often fell short of Wall Street's expectations, and the stock fell 48.7% in 2022.

Doubling the stock price in one year after halving it the year before isn't quite the victory march that Intel's 2023 performance looks like in isolation. The stock is simply back roughly where it was at the end of 2021, albeit with much improved prospects for the long term.

Lower inflation and a generally stronger global economy helped Intel get back on its feet. Moreover, the strategic shift under CEO Pat Gelsinger started paying dividends with more orders for its third-party chip manufacturing services and several impressive product introductions. The company clawed back some of its lost market share from AMD while the demand for chips also expanded.

So, by the end of 2023, investors had forgiven Intel for the sins of the past. Revenues are still slowing down but at a milder and improving pace. Intel keeps burning cash on expensive infrastructure investments, but that chart is also pointing to better days ahead.

The road ahead

It should be noted that Intel's largest stock gains last year sprung from macroeconomic news, not the company's own results and operations. Share prices soared 31% in March and another 23% in November, in both cases due to lower inflation and business upticks in other parts of the semiconductor industry.

At this point, Gelsinger's revamped business plan should start paying off in a big way since the less-efficient chip design projects that started under predecessor Bob Swan have worked their way through the multiyear pipeline of design and manufacturing processes. At the same time, the world is hungry for AI chips, and Intel is ready to support that boom with its own processor designs and newfound verve for manufacturing other companies' chips.

Last year's stock price recovery was undermined by softer business results, which leaves Intel's stock in a Goldilocks zone of being neither cheap nor expensive today. I can't wait to see how the company will perform in a full-health economy with Gelsinger's grand plan in full swing, especially given the worldwide thirst for AI chips. At the same time, Intel faces strong competition in every corner of this opportunity-packed market.

All things considered, I'll gladly hold on to my Intel stock in 2024, but I'm not champing at the bit to buy more. The modest Intel investment I started years ago feels "just right" today.