$INTC · Everything Money · 2026-11-03

Intel's stock plummeted by almost 29% in just one day. This is one of the worst days in decades, and the crazy part is what comes next . Even after this violent crash, the stock is still up 80% this year.

Just a few months ago, the stock was soaring high. Famous investors were flocking to him, and everyone said that the legendary American chipmaker had finally passed the danger zone.

The company then announced its profits. Revenue jumped , exceeding expectations, yet the stock plummeted sharply. So, what the hell happened? Has Intel finally become cheap, or is it just cheaper ? Let's delve deeper and find out.

Now let's rewind, because this was one of the craziest trips in the entire market. At the beginning of this year, even though Intel's stock was at $37, double its lowest level of the previous year, it was still considered a broken and hopeless stock.

Then it caught fire. By the end of June, it had skyrocketed to $142 per share. This means four times its value in just six months. For a sleeping giant like Intel, this is almost unprecedented.

So why did it rise so dramatically? Well, a few major factors combined. First, a new CEO, Lip Po Tan, took over . He promised to put the house in order and run the company with discipline.

Therefore, hopes for a genuine comeback were very high. When Intel finally showed signs of life, money flowed in quickly. Secondly, the US government intervened with funding and effectively became a major contributor.

Third, technology giants Nvidia and SoftBank have invested billions of dollars in Intel. Nvidia alone invested around $5 billion. Guys, this is a strong indicator of confidence.

But it's important to know that investing in Intel is not the same as promising to buy chips from them.

Fourth, Intel has finally achieved a major breakthrough in new chip manufacturing technology after years of embarrassing delays. Suddenly, investors stopped seeing Intel as a dying computer chip company.

They began to dream of her as a big winner in the artificial intelligence boom. This dream is exactly what sent the arrow to the moon.

But there is something that many people overlook. The stock had already calmed down considerably before the earnings announcement. It slipped from $142 to about $92 on its own.

Then the earnings report came in and caused it to plummet from $92 to around $66. Therefore, weak expectations were not the sole cause of the decline. It was the final blow.

Imagine this trip, guys. $17 in March of last year, $37 in January, $142 by June, and now back to the mid-sixties. Now, here's a personal side note because I was actually one of the few on YouTube and elsewhere who said that Intel was selling at near-bankruptcy prices in March of last year.

And when its price rose, I still held onto my shares in Intel.

But guys, I sold what's called a " covered option contract" for about $8 per share . Simply put, what I did was allow someone to buy the stock from me at a price of $8 per share on a certain date.

Well, that has been achieved. So , I lost about 80 or 90% of the shares I owned.

I didn't mind that because I felt Intel wasn't worth $8 a share in its current state. It's a common thing I do with my stocks as a way to earn extra income from the stocks I own.

For example, when Intel's stock price was $70, I sold an option that allowed someone to buy Intel from me for $8 per share after one month.

You might wonder and say: "Why would I do that?" Well, they would do that if they thought Intel's stock price would be much higher than $8. Because if the price reaches $90, for example, their contract with me states that they can still buy it from me at $8 per share.

So, although I get a premium, which is the money they pay me for this right, I lose all the profits between 80 and any other price, 90 or 100 dollars, at which the stock was being sold at that moment.

But remember, my point of view on this matter is that I didn't think Intel was worth $8 per share. So I was completely okay with losing it at that price . Now let's move on to the profits that sparked all this.

And here lies the paradox that baffles everyone. The quarter itself was actually good. Revenue grew by 21%. Profit margins improved, exceeding Wall Street's earnings expectations .

In fact, its adjusted profit, which excludes non-recurring items, more than doubled compared to last year.

What was truly amazing was that it was within the scope of business. Sales in the data center and artificial intelligence sector jumped by 78%. This is its fastest growth in 15 years.

On the surface, this seems amazing. But there is one honest detail: it did not ship 78% more chips. It only shipped about 10% more. The rest of that jump came from selling more expensive products .

It's still a remarkable sign, but it's worth understanding. The demand for chips was so high that they were able to raise their prices significantly.

So you might be wondering, why did this stock collapse? Well, in one word: directions. Guidance is simply what a company tells investors about what to expect in the next few months.

Intel's figures came in much lower than Wall Street had expected . Its revenue forecast was about 10% lower, around 15.5 billion, while the market wanted much more . Its earnings forecast was even worse , coming in 44% lower than Wall Street had hoped.

When a company's forecasts fail to deliver this much, the market reacts quickly and strongly, and that's what happened, with more than 455 million shares traded that day. The reasons behind this really alarmed people.

First, the performance of regular personal computers is impaired. Computer sales are expected to continue declining. Part of the reason is that high memory prices make manufacturing computers much more expensive.

Secondly, a two-week-long incident at one of its factories in Israel will cost it approximately $300 million in sales. But the biggest blow came when the administration admitted something.

Next year, 2027, it may not achieve positive free cash flow . Now, folks, free cash flow is the cash left over after a company has paid all its bills, including all its large capital expenditures such as building new factories and reinvesting in its factories.

Intel has to continue spending huge amounts of money to build factories.

This last point is the essence of the story in short. Intel products are clearly in demand again. We never doubted their brand name . We never doubted their quality , but rebuilding this company into a world-class chipmaker will require more cash, more time, and potentially greater risks than investors had hoped.

I have even encountered a positive problem that I cannot fully take advantage of. The demand for server chips is actually higher than what it can build at the moment. It is suffering from a shortage of a key material used to package the chips, and adding new space to the factory takes time.

Therefore, some demand cannot be met until late next year.

Intel is stuck in a very strange situation. Huge demand on one side and shrinking demand on the other.

Now, here's the most important thing to understand about Intel because it explains everything. Intel is actually two completely different companies that were merged together. On one hand, it designs and sells chips.

That part is extremely profitable. Its data center division generates more than 40 cents in profit for every dollar of sales.

On the other side is the wafer foundry. This is its business of actually manufacturing chips inside giant and extremely expensive factories . Currently, this entity is losing huge sums of money.

This is a gap of approximately 70 cents per dollar between the best and worst parts of the same company. Combining them into a single number hides the truth of what is actually happening.

Simply put, there is a company that generates huge profits, and another that burns money to the bone .

The entire investment hinges on one question . Could that holocaust one day become another cash cow? Folks, optimists believe that Intel is spending lavishly today to build an invaluable American chip manufacturing sector for the country, and may one day print money.

Pessimists, however, believe that the lucrative chip design aspect is quietly funding the dream of an expensive factory that may never pay off .

We will explore this in more detail shortly . Now, guys, a quick reminder. Never take our title or thumbnail image literally. We are not here to provide investment advice. We are here to teach a methodology that you can one day take and apply to your own investments.

If you are not here to learn a methodology that you can apply yourself, you are probably watching the wrong channel.

Now, Intel has attracted some very big names on its rise, making the collapse even more interesting. Aside from buying Nvidia and SoftBank, several well-known hedge funds increased their positions earlier this year.

Tiger Global increased its stake by approximately 160%, and Koto began as a completely new investment center.

But the most entertaining story here is that of Jim Cramer , that boisterous character from television stock shows . Guys, I want to remind you that he is not an investor. He is a day trader.

That's good, but you should keep that in mind when you hear him speak. Last June, he wasn't just an Intel fan. Remember, this is after the stock price increased by about 8 times.

He called it his one and only favorite stock in the entire market. In July, he explicitly asked people to buy Intel. He continued to promote this for several months. Then the profits were released and suddenly he became very angry.

He admitted that he was wrong. He said he underestimated the weakness of the computer hardware sector and overestimated the returns of artificial intelligence.

This is a perfect lesson for all of us. Never buy a stock just because a famous voice on TV or YouTube is excited about it. Base your decision on the actual work and the value you have set for yourself, not on hype and news stories.

And now for the exact part. The same reasons that made people love Intel at 142 were still mostly true at 66. The demand for processors was real, and the factory's dream was still alive.

What changed was not the story . What has changed is the timeframe that investors realize will take to achieve returns. At a price of 142, people were paying a price assuming that the investment would pay off very quickly. This is the difference between price and value.

Now, let's look at both sides of the argument here regarding Intel. But instead of just me telling you, let's go through the real-world cases of optimism and pessimism firsthand using our built-in AI tool, Everything Money, and analyze them.

Guys, our users love this feature so far. We have received many great comments about the time it saves and how quickly they complete their research. So, the first thing we do is input Intel into the stock analyzer in our program, and here at the bottom right, very simply , we can see the optimistic and pessimistic states.

The program will scan the internet to find the three most optimistic and three most pessimistic views about Intel.

Okay guys, before we analyze the company, here are the optimistic points . In a first optimistic sign, Intel announced a 21% year-over-year increase in third-quarter revenue and an improvement in operating profit margin .

Guys, this is important. Yes, they may have missed revenue forecasts and so on , but achieving 21% year-on-year growth is still amazing, and I think many would have wished for that a year ago.

Number two, Intel described demand for its Xeon server processors as exceptionally strong in the third quarter release, and that data center revenue growth was the strongest in 15 years.

We've talked about that before. Guys, I can't repeat myself any longer, I'm tired. Intel's reputation is still good. It's not like another company where the stock is falling, business is deteriorating, and people don't like the product. This is different.

Number three , Intel released a 0.9 processing design kit for the 14A manufacturing node and reported progress in advanced processing work. The reason this is important is that it may help advance its ambitions in the field of chip foundry.

Guys, remember that it's the foundry business that's suffering. This is the aspect that is draining its cash flow. So , if this happens, it is very important for their ability to build chips for other companies.

Okay, let's check out the cases of pessimism because they definitely exist. Revenue and profit forecasts for the fourth quarter came in below analysts' expectations, and management said the slowdown in the PC market could continue until the first half of 2027.

Yes, I mean, guys, they're selling chips. With the rising prices of these chips and the declining demand for personal computers due to costs, this will certainly happen.

Second, the closure of Intel's factory in Israel is expected to reduce server chip supply and revenue over two quarters. We've seen what could be as much as $300 million, but remember, guys, this is temporary. This is not always the case. It's temporary.

Third, Intel said that demand for some data center products exceeded available supply, while its foundry business recorded a significant operating loss. These things point to a challenge in implementation.

So , the interesting thing is that you hear about excess demand and you think that's great. Well, that's the problem they have to deal with . They need to do it properly, because yes, excess demand is great, but if someone needs the product from you and you can't supply it, it might go to someone else.

So, guys, nothing I hear seems like a permanent problem except for the foundry business. They invest a lot in these foundry businesses. If they cannot make this sector profitable, it will be a problem in the long run .

But ruling it out so quickly, I think it's a little premature.

So guys, I'm actually surprised by the drop in Intel's stock today. But first, here's the price of Intel. This is the market value, not the share price on the stock exchange. $340 billion.

Our company is valued at 383 billion. This $ 43 billion difference between market value and company value is essentially their debt. Well, 43 billion is a lot of money, but you have to compare it to their free cash flows.

If they are generating $20 or $25 billion a year in free cash flow , that's nothing. But here's the problem. Last year's free cash flow barely reached $3.8 billion. Over the past five years , their average loss has been $9 billion in free cash flow.

So, there is somewhat of a problem in this regard. It presents a kind of challenge for them.

Next, poor returns on capital. You can attribute this to the fact that their business performance has been poor for several years now, and this is hurting their ability to generate a return on capital.

So, I don't know if this is a great thing to look at in the long term right now, but the good news is that the situation has been improving over the past five years if you're looking for a glimmer of hope.

Now, guys, let's take a look at their profit margin here. Here's what's interesting. This is Intel, which has really been struggling in the last few years, but look at them before that, going back to 1987.

Their average profit margin was probably in the low twenties. Good? The lower twenties range. Therefore, they are capable of generating $100 billion in revenue at some point and achieving a profit margin of 20% of that .

This represents $20 billion in profits and free cash flow. This is important. This is no easy task.

So, let's examine their eight pillars, which, by the way, will mean nothing to me. All eights are X's. All eights are X's. Guys, the amazing thing is if you go back a year and a half, I think they were all X's too.

So, look at that. It is $17 per share, $140 per share, and $66 per share. They are all marked with a large X.

Look at this. The number of outstanding shares is increasing dramatically. wow. Guys, part of me is kind of happy . I mean, part of me is glad that my shares were taken from me at $80 per share.

Now, guys, I've given you a lot of information about our key metrics, and it's very important to understand because I want us to speak the same language, but don't worry. You are not expected to understand this on day one.

What I want you to do is download our completely free PDF file. It will explain all the key metrics, how they are calculated, and what they mean. Furthermore, we are adding a special analysis of Intel with all these key figures in it.

The link is in the description below. Download it completely free .

And guys, that's exactly why I teach on YouTube because everyone there says the story and the numbers will improve on their own. No, you must pay the appropriate price. You must have a safety margin. This is something I cannot stress enough .

So, let's see what the analysts think about the company because they are very optimistic. So, they have earnings this year of $1.50 per share that grows to $7 per share in 2030.

Let's assume you set a price-to-earnings ratio of 20 for this, that makes the stock worth $140. Well, it's not bad to buy at 66 four years from now , but there are a lot of execution risks involved .

That was our great state of pessimism . The risks of implementing these measures are enormous. And as for revenue, look at this, it's doubling from 63 billion to 131 billion over the next four years.

Again, it's all about execution. That's what matters here.

Okay, guys. So, we have some stories. We have some figures. What is Intel's actual value after all this information? This is one of the most difficult companies to evaluate, and here's why.

First, Intel's profit figures are extremely messed up. It announced a large loss, mostly due to $12.6 billion in charges related to a government stock deal . This is not real money coming out of the company's treasury.

It's just an accounting detail. And here's the strange part. Those fees actually increase on paper as the share price rises. This is one of the many reasons why Intel's numbers are difficult to read.

Secondly, remember that it just sold about $23 billion worth of new shares. This helps to finance the factories, but it also means that the company's future profits will now be spread over a much larger number of shares.

Third, the balance sheet . Intel has about $54 billion in cash and investments against about $50 billion in debt. But don't be fooled. Most of this criticism is already intended for other purposes.

It is reserved for the construction of those factories.

After the stock fell to more than half of its peak, the accuracy of the calculations became more important than ever because a cheap look is not the same as a cheap price. Just because a stock is cheaper doesn't mean it's actually cheap.

Let's move on to our stock analysis tool and make assumptions about Intel's future. First , I conducted a 10-year analysis. Do you remember the return on invested capital? Look at this.

The average over 10 years is 6.9%, and over 5 years it was 0.74%. So before their big drop, they were certainly making more than a 12% return on capital, which is n't bad. Not exceptional, but better than the market.

First, revenue growth. Guys, I'm conducting a 10-year analysis. I assumed revenue growth of 5%, 8% and 11% for the next ten years. Next, profit margin and free cash flow. Guys, this part is difficult because they are not in a good position right now .

The question is, how long will they continue to lose money? Therefore, I must assume slightly lower numbers here. I would assume lower numbers than that in reality because I think it will take time to adjust their course.

So guys, I'm going to use percentages of 6%, 15% and 24%.

Keep in mind that the stock analysis tool assumes this starts today. That will not be the case. Therefore, you should definitely add a safety margin here. Next, what is the earnings multiple and free cash flow multiple that I will assign to this company after 10 years?

Well, folks, the average company in the S&P index is between 15 and 17 times earnings. Is Intel better or worse than ordinary companies? At the moment, it is probably at the level of a normal company, if not slightly worse.

So the question is, what price-to- earnings ratio would you assign to it? If she gets rid of her debts 10 years from now, and her business becomes more stable, and these things work out.

This is what makes investing difficult. I put 13, 18, and 23.

Finally, what return do I want ? Okay guys, for those of you who follow the channel, I'm currently using 9.5%. This is not the return I actually want. It is dedicated to our videos to show the intrinsic value.

What is the value of the company? There is no margin of safety here. To obtain a safety margin, you must increase the required return. But I don't know what kind of return you're looking for.

It varies from person to person. Therefore, I am currently setting a rate of 9.5%.

There is something I must tell you before we conclude our analysis of Intel stock.

Therefore, I set my return at 9.5 percent. I pressed the analyze button. The stock price is currently 65. I have a low price at 11 , a high price at 97, and an average price at 40.

So, guys, if I paid $64 per share at its current price today and my average assumptions are correct, I would make a return of about 4% on my money. This does not seem sufficient for a company that has so many events and so much unpredictability.

What if I changed my return to 15%? This percentage of 15% would be sufficient for a company like this. Okay guys, I should pay around $27 or $30 per share based on a 15% return.

Now you can see why I'm so interested in it, at a price of less than $ 30 or $35 per share.