Should Investors Bet on Intel's Turnaround In 2025?

Intel (INTC -1.46%) used to be the 800-pound gorilla of the semiconductor industry. These days, the company formerly known as Chipzilla has lost market share in its most important divisions and missed the bus to the artificial intelligence (AI) boom. At the same time, Intel is leaning into its relatively new chip manufacturing with a vengeance.

Can Intel's updated strategy make up for the missteps in recent years? Is the stock poised for a turnaround in the next year or two? In short, is Intel stock a good buy right now?

Let's find out.

The $50 billion bet that scared investors away

Intel's stock has been struggling for a few years. Share prices peaked at a two-decade high in April that year, before starting a long and painful downturn. The plunge began with Intel's Q1 2021 report, where the company crushed Wall Street's estimates but also revealed its brand-new chip foundry focus.

It's fair to say that the so-called foundry business has been controversial from the start. The company spent more than $50 billion on new and upgraded chip-making facilities over the last two years.

Those infrastructure costs are scaring away many prospective Intel investors. The foundry division isn't even turning a profit yet, and it faces tremendous competition from firmly established rivals Taiwan Semiconductor Manufacturing (TSM 0.39%) and Samsung (SSNL.F 9.01%). What if Intel's massive strategy-shifting investment turns out to be a dead end?

That's the main reason why Intel's stock has fallen 70% from the April 2021 summit. Not even the generative AI upsurge can make up for this expensive idea in the average Intel shareholder's mind. Intel's Gaudi line of AI accelerators can compete with Nvidia's (NVDA -1.44%) industry-standard cards by being far cheaper, allowing system builders to pack many more accelerators into each AI system. Beefy electric bills and boosted system cooling concerns can undermine Intel's cost advantage, using this approach.

Intel's new identity: Chipmaker for hire

So an Intel investment in 2025 is a pretty direct long-term bet on the chip-making foundry business. Longtime challenger Advanced Micro Devices (AMD -2.57%) has stolen Intel's thunder in the central processor unit (CPU) markets for PC and server systems. Nvidia is running away with the AI accelerator market, followed by a large pack of hungry up-and-comers. A turnaround is always possible, but this isn't even what Intel is working on nowadays.

On that note, I think it's important to understand Intel's chip-making ambition. This market has been dominated by Taiwan Semiconductor for decades, with Samsung entering the large-scale arena more recently. Both companies are based in Southeast Asia, conveniently close to the tech manufacturing centers in China and Taiwan. But this geographic concentration is turning into a liability in 2025, as Chinese-American trade tensions keep flaring higher.

So Intel could become the top supplier for American chip designers. Most of the company's chip-making facilities are scattered around the U.S., with large manufacturing campuses in places like Arizona and Oregon. Sending chip orders to these facilities will help domestic semiconductor companies (and their device-building clients) avoid tariffs and trade restrictions on processors made abroad.

This isn't even a new development. Intel's foundry plan launched four years ago, amid the coronavirus-driven chip manufacturing shortage and an earlier version of today's amplified trade conflicts.

Intel might be the best semiconductor deal of 2025

I can't promise that Intel's foundry idea will work out in the long run. However, the semiconductor veteran has too much long-tenured expertise and too much money invested to take a wrong turn here.

And the stock is priced for absolute disaster. Intel shares are changing hands at 1.7 times sales and 0.9 times the company's book value. That's bargain-bin territory in comparison to Intel's closest rivals:

Data taken from Finviz.com on June 4, 2025.

I'm particularly intrigued by Intel's rock-bottom price to book value. A figure below 1.0 suggests that investors might be better served if the company simply shut down its operations, sold all assets, and returned that cash to shareholders instead. Tax effects would make this an ineffective exit strategy in most cases, but you get the idea -- many investors have just given up hope for Intel.

And I think that's a short-sighted view of Intel's updated strategy. In short, Intel's stock looks like a great buy at these low share prices.