2025: Intel Stock's Comeback Year?

Core Viewpoint - Intel is poised for a significant year in 2025, with expectations of improved CPU sales, advancements in its foundry business, and potential benefits from the pro-American policies of the incoming Trump administration [1] Group 1: CPU Market Recovery - Intel has experienced a decline in its CPU market share, particularly against AMD, but its new product lineup, including the Lunar Lake and Arrow Lake chips, manufactured by TSMC using a 3nm process, may enhance its competitive position [3] - The recovery of the PC market and stronger product offerings are anticipated to boost Intel's revenues in 2024, with projected Q4 sales between $13.3 billion and $14.3 billion, indicating positive trends [4] Group 2: Foundry Business and 18A Process - Intel's 18A process is critical for revitalizing its foundry business, featuring advanced technologies that promise improved performance and efficiency, with significant contracts already secured, including with the U.S. Department of Defense [5][9] - The company has achieved key milestones with the 18A process, expecting external customers to begin production in 2025, which could positively shift market perceptions of Intel's stock [6] Group 3: Political and Economic Factors - The incoming Trump administration's focus on U.S. manufacturing may favor Intel due to its substantial domestic production capabilities, potentially leading to regulatory support and increased demand for its foundry services [7][8] - Intel's domestic manufacturing is viewed as vital for national security, which could result in more government contracts, enhancing its market position [9] Group 4: AI Market Opportunities - Intel is expanding its footprint in the AI processor market with its Gaudi 2 and upcoming Gaudi 3 accelerators, presenting an opportunity to capture market share as the focus shifts from model training to inferencing [10] - The cost-effectiveness of Intel's Gaudi 3 accelerator, priced significantly lower than Nvidia's offerings, may improve its competitive edge in the AI market [11] Group 5: Stock Valuation and Growth Expectations - Intel's stock is currently trading at approximately $24 per share, with a valuation of about $27 per share anticipated, supported by a projected revenue growth of around 6% in the coming year [12]