Key Takeaways
- The AI boom has driven significant gains for semiconductor stocks like Nvidia, Broadcom, and Taiwan Semiconductor Manufacturing.
- Intel’s stock has notably underperformed, experiencing a substantial decline during the same period.
- Intel’s foundry business, a key segment, is facing challenges with revenue, profitability, and intense competition, particularly from TSMC.
- Experts suggest Intel’s current stock valuation reflects these difficulties, labeling it a speculative investment for now.
The artificial intelligence revolution has powered impressive growth across the tech sector, with semiconductor companies reaping particularly large rewards.
Chips are fundamental to developing generative AI, and this demand has caused shares of Nvidia, Broadcom, and Taiwan Semiconductor Manufacturing to soar since late 2022.
Nvidia’s stock value, for example, has increased dramatically, while Broadcom and TSMC have also seen their shares climb significantly. The VanEck Semiconductor ETF, a broader market indicator, also shows strong returns over this period.
However, not every company in the chip industry has enjoyed this success. Intel investors have experienced a different reality, with the stock’s value decreasing significantly while the AI roller coaster took off.
With Intel shares trading near their lowest point in 15 years, some investors are wondering if now is an opportune moment to buy.
It’s important to understand why certain semiconductor stocks have flourished while others, like Intel, have lagged. Nvidia specializes in graphics processing units (GPUs), which are essential for training AI models.
Broadcom, on the other hand, excels in equipping data centers with vital networking equipment and assists companies in designing custom chipsets. Taiwan Semi is a market leader in foundry services, bringing chip designs from companies like Nvidia and others to life.
Intel, though a diversified company, has found its foundry business to be a particular area of concern. According to an analysis on Nasdaq, this segment, which manufactures chips for other companies, saw its revenue drop in 2024 and recorded operating losses exceeding $13.4 billion, nearly double the losses from the previous year.
In the first quarter of 2025, Intel’s foundry segment did report a revenue increase. However, management attributed some of this growth to revenue recognized earlier than planned, suggesting a possible deceleration in the coming months.
Intel continues to lose market share to TSMC in the foundry space and has struggled to operate this part of its business profitably. The growth trends for this segment remain unpredictable at best.
The Nasdaq article suggests that Intel is currently in a turnaround phase, and it’s uncertain if new leadership can steer the company back on course.
Given that Wall Street analysts are not forecasting substantial revenue or earnings growth for Intel in the near future, a strong bullish case is difficult to make.
Considering the inconsistencies in Intel’s foundry business and the tough competition it faces, mainly from TSMC, the article views Intel as a speculative stock to own at this time rather than a clear bargain.
