Chip giant Intel (INTC 5.68%) is coming off a solid 2025, with shares rising an impressive 84% last year. The good part is that the stock managed to clock healthy gains of 22% so far this year, despite a big drop last month following the release of its fourth-quarter 2025 results.
Investors decided to book profits after Intel's guidance for the current quarter fell short of expectations. Does this mean it is time to sell this semiconductor stock? Or should investors continue holding it in anticipation that Chipzilla stock could regain its mojo and jump to $100? Let's find out.
Image source: Intel.
Investors shouldn't discount Intel's prospects despite its recent slip
Intel's guidance for the current quarter was below expectations due to supply-related challenges. Management indicated on the company's January earnings call that it was unable to meet robust demand for its chips in both the personal computer and data center markets. CEO Lip-Bu Tan remarked that the supply constraints "meaningfully limited our ability to capture all of the strengths in our underwriting markets."
Intel points out that its supply constraints will be at their most acute levels in the current quarter. Importantly, the supply challenges are expected to start easing from the next quarter. At the same time, Intel's chip production yields -- the number of defect-free, functional chips that can be sold to customers from a silicon wafer -- are also improving.
So, there is a good chance the company's financial performance will pick up as the year progresses, especially given its traction in certain fast-growing niches. For instance, Intel's revenue from sales of custom artificial intelligence (AI) processors increased by 50% year over year in the previous quarter.
Intel points out that this business has now achieved an annualized revenue run rate of over $1 billion. There is further room for growth in this niche for Intel, as shipments of custom AI processors are anticipated to triple by next year from 2024 levels.
In the end, it can be said that Intel's growth could pick up nicely as it resolves supply-related issues and expands into new areas, such as custom AI processors.
NASDAQ: INTC
Key Data Points
But can Intel stock indeed hit $100?
Intel stock currently trades around $46 a share, which means it would have to more than double from current levels to reach $100. The good part is that the company's cost-cutting efforts, improving yields, and the strong underlying demand from its end markets should drive healthy growth in its bottom line.
Analysts expect a 15% jump in Intel's earnings in 2026 to $0.48 per share. The good news for Intel investors is that its bottom-line growth is poised to accelerate from next year.
Data by YCharts.
That won't be surprising due to the points discussed. Assuming Intel indeed achieves $1.40 per share in earnings in 2028 and trades at even 50 times earnings, a premium to the U.S. technology sector's average earnings multiple of 42 due to its eye-popping earnings growth, the stock will reach $70.
So, while Intel stock may not hit $100 anytime soon, it still has the potential to deliver further gains driven by these catalysts discussed.
