Intel has been a standout performer in the S&P 500 this year, with its stock rising more than 220%. The rally is largely attributed to growing demand for its data center and AI products, as well as optimism about its foundry business. That business recently secured a significant agreement with Apple for Intel to become a second supplier.
Intel trades at 81 times this year’s earnings estimates. It trades at 59 times next year’s estimates. Both multiples represent a significant premium to TSMC, the industry leader, suggesting investors may have already priced in a successful turnaround.
Analysts are questioning whether the stock can continue rising, and some say its valuation may not be sustainable. Its future performance will depend heavily on the continued success of its foundry business and its ability to grow profits enough to justify the premium.