Intel Is Up 90% in 12 Months. Can It Actually Sustain This Comeback in 2026?

Core Viewpoint - Intel has rebounded 90% in the past year, but its high valuation raises questions about sustainability in the long term, particularly as it trades at 112 times earnings while facing ongoing revenue growth challenges [1]. Financial Performance - Intel's EBITDA is projected to grow from $1.2 billion in 2024 to $25.1 billion by 2028, indicating potential for significant financial recovery [1]. - Analysts expect Intel's earnings per share (EPS) to reach $0.48 in 2026, a 15% increase, with projections for 2027 EPS potentially doubling to nearly $1, and some estimates as high as $1.8 [1]. Market Position and Valuation - Despite a 90% stock rebound, Intel's valuation remains high, trading at 112 times earnings, which is considered expensive given its history of losses [1]. - The company is expected to be valued at around $500 billion by 2028, unless the AI market significantly boosts its performance [1]. Growth Potential - Revenue growth is anticipated to be in the 5% to 10% range in the coming years, which may not justify a 40x EBITDA valuation [1]. - CEO Lip-Bu Tan is recognized as a strong leader, and strategic partnerships with AI hyperscalers could lead to over 20% annual sales growth if executed effectively [1]. Short-term Outlook - Intel has guided for Q1 revenue between $11.7 billion and $12.7 billion, with flat EPS, indicating a cautious near-term outlook despite exceeding Q4 expectations [1]. - The first half of the year is critical for validating Intel's ramp-up in manufacturing capabilities, particularly with the 18A technology [1]. Investor Sentiment - There is a belief that Intel's stock may cool off as investors are currently pricing in future execution success, with expectations for government and AI company support [1]. - The stock is trading at a premium compared to historical averages, and a significant correction is not anticipated unless earnings reports indicate a swift recovery [1].