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INTC Plunges 35% in the Past Year: Should You Dump the Stock?

Supriyo Bose
Mon, June 9, 2025 at 10:28 AM EDT 5 min read

Intel Corporation INTC has plunged 35.1% over the past year against the industry’s growth of 12.3%, lagging its peers Advanced Micro Devices, Inc. AMD and NVIDIA Corporation NVDA. While NVIDIA stock is up 16.4%, Advanced Micro has declined 27.5% over this period. Much of Intel’s underperformance is attributable to the severe financial difficulties and operational challenges as it plays a catch-up game with its rivals.

INTC Slow Off the Blocks?

While most of the competitors evolved with the changing demand patterns, Intel fell behind others as it hung on to its legacy products. For example, despite making significant inroads in AI (artificial intelligence) chips, Intel lagged NVIDIA on the innovation front with the latter’s H100 and Blackwell graphics processing units (GPUs) being runaway successes. This offered a competitive advantage to NVIDIA, with leading technology companies reportedly piling up NVIDIA’s GPUs to build clusters of computers for their AI work.

Moreover, Intel has been facing challenges due to the disruptive rise of over-the-top service providers in this dynamic industry. Price-sensitive competition for customer retention in the core business is expected to intensify in the coming days. Aggressive competition is likely to limit the ability to attract and retain customers and affect operating and financial results.

Bitter US-China Trade Ties Continue to Hurt INTC

An accelerated ramp-up of AI PCs has significantly affected Intel’s short-term margins, as it shifted production to its high-volume facility in Ireland, where wafer costs are typically higher. Margins were also adversely impacted by higher charges related to non-core businesses, charges associated with unused capacity and an unfavorable product mix. Competitive pricing pressure from rivals has further dented its profitability.

China accounted for more than 29% of Intel's total revenues in 2024, making it the single largest market for the company. However, the communist nation's purported move to replace U.S.-made chips with domestic alternatives significantly affected INTC’s revenue prospects. The directive to phase out foreign chips from key telecom networks by 2027 underscores Beijing's accelerating efforts to reduce reliance on Western technology amid escalating U.S.-China trade and tariff tensions.

As Washington tightens restrictions on high-tech exports to China, Beijing has intensified its push for self-sufficiency in critical industries. This shift poses a dual challenge for Intel, as it faces potential market restrictions and increased competition from domestic chipmakers. In addition, weaker spending across consumer and enterprise markets, especially in China, resulted in elevated customer inventory levels.

Estimate Revision Trend for INTC

Earnings estimates for Intel for 2025 have moved down 40.8% to 29 cents over the past year, while the same for 2026 has declined 31.2% to 77 cents. The negative estimate revision depicts bearish sentiments for the stock.