Intel (INTC, Financial) shares fell by 2.91% on Tuesday, closing at $22.05. This decline came after the company's Vision 2025 event led by new CEO Lip-Bu Tan, who discussed several strategic challenges and plans for the future. Investors were seemingly disappointed by the lack of announcements regarding the sale of the foundry business.
At the Vision 2025 event, Intel's CEO addressed the need for culture changes to stay competitive against AI chip-design leaders like Nvidia and AMD. There was also a focus on expanding third-party foundry services and considering the spin-off of non-core business units. However, Intel did not announce any plans to sell its foundry business, a decision that may have contributed to the stock's decline.
Despite this recent drop, Intel's stock has shown a positive trend in 2025, with a 10% increase attributed to Tan's leadership and the potential restructuring of the foundry business. Notably, the foundry unit has been a significant center of losses, facing challenges with the 18A manufacturing process and competition from Taiwan Semiconductor Manufacturing.
From a valuation perspective, Intel has one severe warning sign related to its Altman Z-Score, indicating financial distress. Despite this, the GF Value indicates that Intel is currently modestly undervalued, with a GF Value estimate of $26.54. This suggests potential upside for the stock, though investors should remain cautious due to the company's current challenges and the industry's competitive landscape.
Intel's historical and forward-looking metrics show mixed signals. The company's P/B ratio stands at 0.96, indicating potential value, but the absence of a P/E ratio highlights the recent financial struggles. Nevertheless, Intel's strategic responses and future announcements are likely to play a critical role in shaping investor sentiment and stock movement in the coming months.
