Forget Intel: This AI Chip Kingpin Is the Real Way to Ride the Generative AI Gold Rush

Core Insights - Intel has experienced a significant stock increase of 135% over the past six months, outperforming the PHLX Semiconductor Sector index which gained 47% [1] - The rise in stock price is attributed to improved investor confidence due to technological advancements, cost-optimization efforts, and a strong balance sheet supported by investments from the U.S. government, Nvidia, and SoftBank [1] Financial Performance - Intel's fourth-quarter 2025 results showed a 4% year-over-year revenue decline to $13.7 billion, while non-GAAP earnings rose by 15% to $0.15 per share, exceeding expectations [2] - Despite better-than-expected earnings, Intel's guidance for break-even earnings in the current quarter led to a 12% drop in stock price during aftermarket trading [3] Supply Chain Issues - The company cited supply shortages as a reason for its weak performance, particularly in the data center and artificial intelligence segment, which could have seen higher revenue with better supply [4] - Management anticipates that supply constraints will be most severe in Q1, but expects improvements starting in Q2 2026 and continuing into the second half of the year [4] Valuation Concerns - Intel's stock is currently trading at 88 times trailing earnings and 85 times forward earnings, raising concerns among investors about its high valuation amidst declining earnings [5] - Despite management's positive outlook on demand for AI chips, the earnings decline has caused investor anxiety given the stock's elevated valuation [5] Market Positioning - For investors looking to benefit from the generative AI trend in the semiconductor market, it may be more advantageous to consider other chip companies with better supply chain control [6]