Intel Corporation (INTC)
 Equity Research Report – December 2025

1. Fundamental Analysis

Growth & Profitability

Intel’s TTM revenue sits at $53.4 billion (−1.5% YoY), continuing a multi-year decline from the 2021 peak of $79 billion. Gross margins have fallen from 55.5% in 2021 to ~33% TTM but are now stabilizing at ~35.6% due to aggressive cost cuts and early foundry efficiencies. Net margins remain near zero due to elevated R&D (~$16B annually) and restructuring charges. Free cash flow is deeply negative at -$12 billion TTM, driven by >$25 billion annual capex for the critical 18A process node.

Valuation vs Peers

On forward metrics, Intel trades at a meaningful discount to peers — pricing in execution risk but offering substantial upside if the turnaround succeeds.

Insider Activity

No significant open-market buys or sells in the past six months (only routine tax-withholding sales). Neutral signal.

2. Investment Thesis: NEUTRAL / HOLD

Intel’s ambitious foundry build-out and AI product roadmap present asymmetric long-term upside, but persistent revenue weakness, negative FCF, and fierce competition justify caution over the next 12–18 months.

Three Supporting Arguments

• 18A node ramping in H2 2025 positions Intel to capture 10–15% of the $150B+ gen-AI chip TAM by 2026–2027.
• Gross margins already inflecting; $5–6B op-ex cuts target 40%+ gross margins by 2026.
• ~40% forward P/E discount to peers implies 30–50% upside if execution is merely decent.

Two Key Risks

• Ongoing share erosion to NVDA/AMD in high-margin AI accelerators.
• Prolonged negative FCF and potential equity dilution if 18A yields or external foundry wins disappoint.

3. Sector & Macro Outlook

Semiconductor industry expected to grow 15% in 2025 to ~$789 billion (IDC), driven by AI and data-center spending. Declining interest rates ease Intel’s massive capex burden, while U.S.-China trade friction and potential new tariffs remain headwinds.

4. Catalyst Calendar

Short-term (0–6 months):
• Q4 2025 Earnings – January 29, 2026
• 18A yield updates & Panther Lake launch confirmation

Long-term (1–3 years):
• External foundry revenue scaling toward $20B+ run-rate
• Meaningful share gains in AI accelerators (Xeon 6, Gaudi 3, Falcon Shores)

Bottom Line

Intel is optically cheap and sits at a potential inflection point with 18A, CHIPS Act support, and a revitalized product roadmap. However, until we see sustained revenue growth, positive free cash flow, and tangible foundry customer wins, the risk/reward remains balanced.
Hold and monitor execution closely.