With a market capitalization of around $90 billion, Intel (INTC) has long held a leading position in the global semiconductor industry. However, the company has faced growing challenges in recent years, such as increased competition, production setbacks, and shifting market dynamics.

The California-based semiconductor company reported mixed first-quarter results, with a cautious outlook for the coming year amid trade uncertainty. However, CEO Lip-Bu Tan laid out a multi-pronged strategy for regaining the company’s competitive advantage and investor confidence. Intel’s stock has gained 1.8% year-to-date, outpacing the S&P 500 Index’s ($SPX) 4.1% decline. Let’s see if these strategies can help the stock reach its high price estimate of $62 this year. 

Intel Targets Financial Discipline and Focus on Core Strength

In the first quarter, Intel reported revenue of $12.7 billion, flat year-over-year. Adjusted earnings fell 28% to $0.13 per share from the prior year’s quarter. During the Q1 earnings call, CEO Lip-Bu Tan didn’t mince his words about the internal issues hampering Intel’s progress. “Organizational complexity and bureaucracies have been suffocating the innovation and agility we need to win,” he stated, referring to a bloated structure that stifled decision-making and creativity. His solution is to streamline operations and allow engineering teams to move more quickly.

To accomplish this, Tan announced aggressive cost-cutting measures. The company plans to reduce operating expenses to $17 billion in 2025 and $16 billion in 2026. Growth capex will be reduced by an additional $2 billion this year, bringing the total to $18 billion. Tan emphasized, “The best products always win.” The company intends to shift resources away from non-core projects and toward core businesses, particularly client and server products. Intel’s Intel 18A ramp remains on track for the second half of 2025, with Panther Lake SKUs available by the end of the year and more to come in early 2026.

These moves came after Intel reported a negative $3.7 billion in adjusted free cash flow in the first quarter despite exceeding revenue and earnings expectations. Management also emphasized that Intel’s transformation must take place within financial constraints. 

To shore up its finances, Intel announced the sale of a 51% stake in Altera to Silver Lake for $9 billion, with $4.4 billion in proceeds. In addition, the company intends to monetize portions of Intel Capital’s portfolio rather than completely spin off the division. Intel’s cash balance at the end of the first quarter was $21 billion, with $1.1 billion coming from CHIPS Act grants.

Outlook Clouded by Uncertainty

According to management, the economic outlook is becoming more uncertain as trade policy shifts and inflation and regulatory risks emerge. As a result, Intel issued a broader-than-usual Q2 revenue guidance range of $11.2 billion to $12.4 billion, assuming breakeven adjusted earnings per share. The consensus estimate for second-quarter revenue is $11.8 billion, with a profit of $0.01 per share. Analysts predict that revenue will fall 5% in 2025 before increasing by 5.7% in 2026. 

Furthermore, analysts predict that the company will earn $0.30 per share in 2025, up from a $0.13 loss the previous year. Earnings could rise by 170% in 2026, reaching $0.82 per share. 

Intel is still fairly valued, trading at 21 times forward earnings for 2026. If earnings momentum builds, the stock may bounce back. 

Is INTC Stock a Buy, Hold, or Sell on Wall Street?

Following Q1 results, Wells Fargo analyst Aaron Rakers reiterated his “Hold” rating on Intel, with a target price of $22. Raker believes that while Intel’s advancements in PowerDirect technology and advanced packaging are promising, their commercial impact remains uncertain. Rakers also emphasized Intel’s efforts to reclaim ground in the server CPU market and broaden its AI silicon offerings. However, these initiatives are still in development, and the company’s cautious capital spending, which focuses on improving equipment deployment efficiency in the absence of firm customer commitments, reflects a wait-and-see strategy. 

Bank of America Securities analyst Vivek Arya also maintained a “Hold” rating with a $23 price target. Arya cited the lack of updated financial targets and the intensifying CPU and AI accelerator battles as ongoing challenges for Intel as it transforms.

The consensus agrees, rating INTC as a “Hold.” Of the 38 analysts covering the stock, one rates it a “Strong Buy,” 32 rate it a “Hold,” and five suggest a “Strong Sell.” The average target price of $22.42 implies the stock can rise by 10% from current levels. Plus, its high price estimate of $62 suggests the stock has an upside potential of 210% over the next 12 months.