Do you like Rocky? I like Rocky. Who doesn't love an underdog story? The soundtrack is great, Sylvester Stallone puts on a spectacular performance, and Carl Weathers is great as Apollo Creed.
Well, Intel (INTC 4.50%) is an over-the-hill company facing the same odds Mr. Balboa was, but unlike the Italian Stallion I don't think Intel will snatch victory from the jaws of certain defeat.
Image source: Getty Images.
The company used to rule the semiconductor world as the largest manufacturer of semiconductor chips on the planet. But its fall from grace in the 2010s was spectacular and in 2017 it lost its crown to Samsung (SSNL.F +55.02%). And its decline has not stopped despite an $8.9 billion shot in the arm from Uncle Sam.
Government investment might have stabilized Intel for now, but in the long run I don't see it pulling out of this tailspin.
NASDAQ: INTC
Key Data Points
Intel's not inside anymore
Intel is a struggling company that has seen its revenue on a rapid decline since 2021. Apple (AAPL +0.62%) used to use Intel processors in its MacBook line and I'm sure we all remember the "Intel Inside" tag line back in the day.
But Apple started the process of replacing Intel in 2020 and finished the breakup in 2023 when it stopped selling the last Intel models of its laptop lines. The revenue falloff since then has been staggering.
For December 2021, Intel recorded revenue of $79 billion. The next year, its revenue dropped to $63 billion. Then to $54.2 billion in 2023, $53.1 billion in 2024, and in 2025 it only recorded revenue of $52.8 billion. In all, 2025's revenue is a 33% decline from 2021.
Intel's profit margins are also looking very rough. Intel's gross margin for Q4 2025 was 37%, down 4.2% year over year and its operating margin for the whole of 2025 is -4.2%, and negative margins aren't a good sign to say the very least. Worse still, Intel projects that same rate of profitability decline into Q1 2026. The company is also carrying some serious debt relative to its cash reserves. Total debt stands at $46 billion while Intel's cash reserves are at $14.2 billion.
The government investment does stand to help Intel and gives it a seriously powerful benefactor in its corner. It seems the government's goal is to bolster America's domestic semiconductor production. To that end, Intel is investing $36 billion into two new semiconductor factory in Ohio and $32 billion into two new factories in Arizona.The first Ohio plant was originally meant to begin production in 2025 or 2026 but it had to delay the plant's opening until at least 2030, citing financial pressures, that's also not a good sign.
So, we're unlikely to see any payoff on the thing the government invested in Intel for until the start of the next decade at the earliest. Now, Intel does have enough inertia to keep going like this for a while. Despite declining revenues it's still bringing in over $50 billion annually and the company's hardware is still ubiquitous in the PC and server CPU market where it holds 72% market share. But even in Intel's stronghold Advanced Micro Devices (AMD 6.09%) is chipping away at Intel's dominance.
And, despite Intel's surge in late 2025, over the past five years it has only returned 6% to the S&P 500's 79.9%. I don't think Intel is going to $0 either through bankruptcy or total collapse of its business. It's simply too big for that to happen in the short term and the company has enough assets it can sell off or leverage to keep the lights on.
However, if something doesn't change in company leadership or Intel doesn't start aggressively trying to get new hardware deals to replace the one it lost in Apple, then I think it is consigned to the slow death of having its once dominant market share gobbled up by younger and/or more innovative competitors. In short, it will go out not with a bang but with a whimper.
Rocky Balboa might have been able to go the full 15 rounds with Apollo Creed, but Intel doesn't look like it has enough fight in it to get past round three from where I'm standing. Intel isn't likely to be headed to $0 but it's certainly not reclaiming its title anytime soon.
