Intel Stock's Biggest Ally: Washington?

Core Insights - Intel's stock has surged nearly 20% recently, reaching approximately $24.50 per share, driven by a positive shift in narrative following a White House meeting with President Trump [1][2] - The Trump Administration is reportedly considering a direct stake in Intel, highlighting its strategic importance in U.S. semiconductor manufacturing [2] Financial Performance - Intel reported a 25% increase in second-quarter earnings, with net income of $1.6 billion (28 cents per share), compared to $1.28 billion (22 cents per share) a year ago [4] - Revenues have declined at an average rate of 11.2% over the last three years, with a 4.0% decrease from $55 billion to $53 billion in the last 12 months [5] - Quarterly revenues fell 0.4% to $13 billion in the most recent quarter compared to the same quarter last year [5] Profitability Metrics - Intel's operating income over the last four quarters was -$4.1 billion, resulting in an operating margin of -7.8% [6] - The net income for the same period was -$19 billion, indicating a net income margin of -36.2% [6] Financial Stability - Intel's debt stood at $50 billion, with a market capitalization of $102 billion, leading to a debt-to-equity ratio of 52.5% [7] - Cash and cash equivalents accounted for $21 billion of Intel's total assets of $192 billion, yielding a cash-to-assets ratio of 10.9% [7] Market Resilience - Intel's stock has underperformed compared to the S&P 500 during recent downturns, including a 63.3% decline from a high of $68.26 in April 2021 to $25.04 in October 2022 [8] - The stock has not yet recovered to its pre-crisis high, with the highest price since then being $50.76 in December 2023 [8] Valuation Comparison - Intel's price-to-sales (P/S) ratio is 1.9, significantly lower than the S&P 500's ratio of 3.3, indicating that Intel stock appears cheap relative to the broader market [5]