Intel Corporation (INTC): A Bear Case Theory

We came across a bearish thesis on Intel Corporation on TechIt_alt’s Substack. In this article, we will summarize the bulls’ thesis on INTC. Intel Corporation's share was trading at $40.01 as of December 1st. INTC’s trailing and forward P/E were 666.83 and 66.67 respectively according to Yahoo Finance.

Intel’s Q3 results delivered a headline beat, with revenue up 3% year-over-year to $13.7 billion and EPS of $0.23 surpassing expectations, yet the underlying story remains mixed. Much of the recent stock momentum reflects optimism around partnerships with Nvidia, SoftBank, and U.S. policy support under the “Made in America” narrative rather than operational improvement.

Management’s Q4 outlook implies a sequential revenue decline, signaling only modest recovery in PCs and continued weakness across Data Center & AI and Foundry. The launch of Panther Lake on the 18A node is fueling investor enthusiasm, but Intel’s own guidance suggests the AI-PC cycle’s impact remains limited for now.

Margins offered little reassurance—though gross margin exceeded guidance at 38%, CCG’s profitability slipped, and EPS strength stemmed from a one-off Altera stake sale rather than core growth. Foundry’s path to profitability by 2027 still appears ambitious amid soft external demand and intensifying competition from AMD, Nvidia, and TSMC. Intel’s trimmed 2025 CapEx of $18 billion underscores limited visibility on external orders, revealing a disconnect between market exuberance and the company’s cautious tone.

While CCG rose 8% sequentially and DCAI improved 4.5%, Foundry revenue declined, and margin compression is expected to persist. Structural risks include heavy China exposure, geopolitical uncertainty, and the potential “capital trap” of funding new nodes without external scale. Upside catalysts—such as ASIC wins or major foundry contracts—remain speculative. With fair value estimated near $26 per share versus current levels around $38, Intel’s resurgence looks more narrative-driven than fundamental, leaving an asymmetric risk-reward skew to the downside.

Previously we covered a bullish thesis on Intel Corporation by DeepValue Capital in April 2025, which highlighted the company’s turnaround potential under new leadership and strong positioning in AI and domestic manufacturing. The company’s stock price has appreciated approximately by 104.44% since our coverage. The rally took place in part due to the announcement of Nvidia's 5-billion-dollar investment in Intel in September 25. TechIt_alt shares a more cautious view but emphasizes Intel’s ongoing execution and profitability challenges.

Intel Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 82 hedge fund portfolios held INTC at the end of the second quarter which was 91 in the previous quarter. While we acknowledge the potential of INTC as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy NOW 

Disclosure: None.