Intel (NASDAQ:INTC) closed at $24 a share a year ago. As of this writing, it trades near $89, about 3.7 times the price a year ago. The stock has also risen around 141% in 2026 alone.
However, the stock hit a high of $142.35 in late June and has fallen around 38% since then. It also trades below the $95 a share that Intel got in August, when it sold about 242 million new shares for approximately $23 billion.
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The stock’s direction from here depends on three things: whether the foundry wins external customers, how quickly earnings grow under more than $20 billion in capital expenditures, and across how many shares those earnings are split. Here is how I would turn those three into a range.
Image source: Intel.
Growth is back
Intel’s revenue in the second quarter rose 25% year over year, to $16.1 billion — an acceleration from the first quarter’s 7% and the fourth quarter of 2025’s 4% decline. Non-GAAP (adjusted) gross margin reached 41.8%, 12 percentage points wider than a year earlier, and adjusted earnings per share were $0.42, versus a loss of $0.10 in the year-ago quarter.
The data center and artificial intelligence (AI) segment did most of the work, with revenue rising 59% year over year, to $6.3 billion, and operating income of $2.5 billion.
And management forecasts third-quarter revenue between $15.8 billion and $16.8 billion, implying about 19% growth at the midpoint — slower, but well above anything Intel posted in 2025.
Will the foundry win any big customers?
Intel’s foundry revenue grew 31% year over year, to $5.8 billion, and its operating loss narrowed to $2.1 billion, from $3.2 billion a year earlier and $2.4 billion three months prior. But almost all of that revenue comes from Intel making chips for itself. Revenue from external customers was $293 million.
The company is spending as if that could change. Chief financial officer David Zinsner said on the second-quarter earnings call that Intel now expects capital expenditures of more than $20 billion in 2026 and that 2027 spending should be “significantly above the 2026 levels.”
None of this has a big external name attached yet. Fortinet joined in July for a security processor, but the grand prize is Intel 14A, the next manufacturing process.
Version 0.9 of the 14A design kit (the toolset external chip designers work on) is scheduled for October. And CEO Lip-Bu Tan said in January that he expected customers to start making firm supplier decisions in the second half of this year and during the first half of 2027.
Those customer decisions, I believe, are what drive both ends of the range. Zinsner said in January that Intel would not spend on 14A capacity until it had secured customers. But Tan said on the second-quarter earnings call that Intel decided during the quarter to fully commit to high-volume 14A production in 2028, citing demand for its own products along with customer conversations. So the money will be spent either way. An external commitment determines whether customers help pay for it.
A larger share count
Intel had 5.04 billion shares outstanding at the end of June, and the August sale added about 242 million. That puts the number near 5.3 billion, approximately 21% above the year-ago quarter’s average of 4.37 billion.
Of course, the balance sheet strengthened. Intel had about $30 billion in cash and short-term investments at the end of June, before the sale. But every dollar the company earns will be split across a fifth more shares than a year ago.
Where will Intel stock be in 5 years?
Analysts expect around $2 in adjusted earnings per share next year. At $89, that equals about 44 times next year’s earnings.
At the low end, no big 14A customer emerges and the foundry continues to lose money on Intel’s own chips. That leaves a products company earning about $2 a share, which, at 15 times earnings, could put the stock near $30.
At the midpoint, the foundry reaches breakeven by the end of the decade, earnings rise to about $3.50 a share, and a 25-times-earnings multiple puts the stock near $90.
At the high end, 14A wins a couple of big customers, the foundry turns profitable, and earnings reach about $6 a share by 2031. At between 25 and 28 times earnings, that equals between $150 and $170, or an annual return of between 11% and 14% from here.
In other words, the current price already assumes the middle scenario. It could be said that the business is in its best shape in a decade. But, at this price, the reward for being right on the foundry is approximately the same size as the penalty for being wrong. I would stay on the sidelines for now. An identified 14A customer with volume to back it up would change my mind.
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Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Fortinet and Intel. The Motley Fool has a disclosure policy.
Intel Stock Tripled in a Year, So Where Will It Be in 5 Years? was originally published by The Motley Fool
