It's been hard to ignore Intel's (INTC +0.20%) impressive share price gains over the past year. The company initially didn't benefit from the rise of artificial intelligence the way many other tech companies did. But a renewed focus on making processors, a government investment, and new chip agreements have changed Intel's narrative.
And what's followed has been a monumental run for Intel's stock, which is up 528% over the past 12 months, and about 259% year to date, as of this writing.
So, is it too late to buy Intel stock? I think it may be. Here's why it's going well for Intel and why investors may still be better off not going all in on this semiconductor stock right now.
Image source: Getty Images.
What's going well for Intel
A handful of factors are contributing to Intel's rise, including the U.S. government's $8.9 billion investment in the company, which gave it about a 10% stake in Intel at the time.
That move was one of the first catalysts for attracting investor attention, as some analysts believe the company may be more likely to succeed with the government's backing.
The government's investment in Intel came as the company is turning much of its focus on manufacturing processors for customers -- as opposed to just designing and making its own.
So far, that move has already been a boon for Intel, with the company scoring the following agreements over the past year:
- Alphabet: The tech giant has an agreement with Intel to manufacture 3 million of its custom Tensor Processing Units for its AI cloud infrastructure.
- SpaceX and Tesla: The Elon Musk-led companies are working with Intel on the $55 billion Terafab project, in which Intel will design and manufacture advanced AI and aerospace processors for them.
- Apple: President Trump said recently that Apple will use Intel processors in some of its Mac computers and eventually iPhones in the coming years. It's important to note that neither company has confirmed an agreement yet, but separate reporting has indicated the two companies are working on a deal.
Adding to investor optimism is the fact that Intel's first-quarter sales of $13.6 billion and non-GAAP (adjusted) earnings per share were ahead of the consensus estimate of $12.4 billion and $0.01 per share, respectively.
What's more, sales from Intel's foundry business rose by 16% to $5.4 billion, indicating that its reinvigorated semiconductor manufacturing business is off to a good start.
NASDAQ: INTC
Key Data Points
Intel is too expensive and looks like a momentum stock right now
Despite all the good news for the company, investors need to know Intel stock is very expensive, even compared with other technology stocks. Intel has a price-to-earnings (P/E) ratio of over 900, far above the average P/E ratio of 37 for tech stocks.
Even if you're comfortable paying such a high premium for Intel, it's important to note that some of the deals and agreements Intel is pursuing haven't generated any sales or earnings for the company yet.
What's more, Intel's foundry business remains unprofitable despite rising sales, reporting an operating loss of $2.4 billion in Q1 2026.
And finally, Intel's rapid share price increase over the past year makes it look like a momentum stock right now. That means investors may be pushing up Intel purely on the headlines it's been generating, rather than because of major improvements to its top and bottom lines.
Could Intel still be a good long-term investment? Sure, if the company can turn its potential agreements and deals into strong sales and earnings growth in the coming years. But as it stands, Intel's share price surge appears to be driven by investors getting excited about its prospects, rather than its financial results.
And with rising investor skepticism for semiconductor stocks lately, now could be an especially bad time to pay such a high premium for Intel stock.
