# Intel: revenue up 21%, a worst day since 1974, and a Foundry still losing money, so reduce at $59.97 INTC, Nasdaq. Published November 3, 2026. Price as of the November 2, 2026 regular session close. Latest reported quarter: July to September 2026. ## Verdict: REDUCE at $59.97 Intel trades at 1.49 times my Base value of $40.37. The price needs 2031 earnings of $4.68 a share at 20 times, against my Base of $2.49, or an exit multiple of 38 times on my Base path. The two methods differ by 42%, so Confidence is D and the required margin of safety is 60%. At that margin the buy range is $12.77 to $19.52. - Bear value: $14.72 - Base value: $40.37 - Bull value: $74.68 - Upside to base value: -32.7% - Maximum buy price: $12.77 (limit; range $12.77 to $19.52) - Required margin of safety: 60% (grade D plus 5 points for method divergence) - Cross-check value (sum of the parts): $48.79 per share (-18.6% versus the price) - Market value: $318 billion on 5.31 billion shares; cash $54.0 billion, debt $50.1 billion - Earnings multiple: 63 times my 2027 earnings of $0.95 a share, after share-based pay - What the price implies: 2031 earnings of $4.68 a share at 20 times, or Foundry valued at about 1.0 times its factory book value - September quarter: revenue $16.5 billion, up 21%; non-GAAP operating income $3.23 billion, margin 19.6%; non-GAAP earnings $0.52 a share - December quarter guidance: revenue $15.0 to $16.0 billion; non-GAAP gross margin 38.0%; non-GAAP earnings $0.25 a share - Cash flow: operating cash flow $5.1 billion; adjusted free cash flow $1.6 billion; management expects 2027 free cash flow not to be positive - Dividend: none found - Business quality: 46/100 - Valuation score: 3/100 - Confidence: 11/25, grade D Intel reported revenue up 21% and non-GAAP earnings per share up 126% on October 29, and the shares fell 28.6% the next day, the worst day since 1974. The two facts fit together once you read the guidance: December quarter revenue of $15.0 to $16.0 billion, earnings of $0.25 a share and a gross margin of 38.0%. At $59.97 the shares pay 63 times what I expect Intel to earn in 2027. At $59.97 on the November 2, 2026 close, Intel trades 48.6% above my weighted Base of $40.37, which is 32.7% below the price. The Bear value of $14.72 is 75.5% below the price and the Bull value of $74.68 is 24.5% above it. I assign no probabilities to the cases. The verdict is Reduce. Valuation route: a chip designer and manufacturer in the middle of a factory build-out, valued on five-year earnings per share after share-based pay with an exit multiple, and cross-checked by valuing the product businesses on earnings and the Foundry on its factory assets. Values are present fair-value estimates, not 12-month price targets. ## What Intel is Intel designs processors and, unlike most of its rivals, builds many of them in its own factories. Its Products business sells PC chips (the client group, CCPG) and server chips (the data center and AI group, DCAI). Its Foundry business runs the factories and is trying to win outside customers. The Foundry reports an operating loss of $1.85 billion in the September quarter on revenue of $6.7 billion, much of it sales to Intel's own product groups. Intel Products earned $5.32 billion of operating income in the same quarter. Foundry lost $1.85 billion. The whole valuation question is how long the second number offsets the first, and what the factories are worth if the outside customers do not arrive. ## The latest results | September quarter 2026 ($ billion) | Result | Comment | | --- | --- | --- | | Revenue | 16.5 | up 21% from a year earlier | | Gross margin | 43.0% GAAP, 44.1% non-GAAP | GAAP is the standard accounting measure; non-GAAP excludes items such as share-based pay | | Operating income | 2.52 GAAP, 3.23 non-GAAP | margins of 15.3% and 19.6% | | Net income | 3.32 GAAP, 2.76 non-GAAP | GAAP is higher, from items outside operations that I did not trace | | Earnings per share | $0.60 GAAP, $0.52 non-GAAP | non-GAAP up 126% from a year earlier | | Segment, September quarter ($ billion) | Revenue | Operating income | Comment | | --- | --- | --- | --- | | Client computing (CCPG) | 8.1 | 2.29 | revenue down 5% | | Data center and AI (DCAI) | 7.3 | 3.04 | revenue up 78% | | Intel Products total | 15.4 | 5.32 | revenue up 22% | | Intel Foundry | 6.7 | -1.85 | up 16% from the June quarter; outside customers $0.411 billion, helped by a one-time program | | All other | 0.7 | not used | down 30%, after the sale of part of the Altera stake | Segment revenues do not add to the $16.5 billion total, because the Foundry sells to Intel's own product groups and those sales are removed from the company total. | December quarter guidance | Guidance | Comment | | --- | --- | --- | | Revenue ($ billion) | 15.0 to 16.0 | press reports put the consensus near 17 | | Gross margin | 38.0% non-GAAP, 37.1% GAAP | includes about 2 points from the Israel factory accident | | Earnings per share | $0.25 non-GAAP, $0.10 GAAP | against $0.52 in the September quarter | | Operating expenses ($ billion) | about 4.4 non-GAAP | about 16.3 for 2026 | | Client computing | down more than 20% from the September quarter | PC inventory correction | | Data center and AI | up in the mid-teens from the September quarter | supply constrained | Management said the personal computer market should fall about 12% in 2026, with the second half down more than 20%, and about 10% more in 2027. It expects server processor units to grow about 30% in both years, with supply constrained through 2027 and into 2028. A fault at its Israel factory (Fab 28) closed it for about two weeks and costs roughly $300 million of December quarter revenue, and a similar hit is possible in the March quarter. ## What the cash flow is made of - **Cash flow is positive but thin against the spending.** Operating cash flow was $5.1 billion in the September quarter and $13.2 billion in nine months. Gross capital spending was $4.2 billion in the quarter, and adjusted free cash flow was $1.6 billion. - **Spending is going up.** Gross capex is about $20 billion in 2026 and management said it rises strongly in 2027. It also said 2027 is unlikely to produce positive free cash flow, and that it will reduce debt that year. - **The history is poor.** Free cash flow was -$15.7 billion in 2024 and -$4.9 billion in 2025, and $2.8 billion over the twelve months to June 2026. Revenue was $54.2 billion in 2023, $53.1 billion in 2024 and $52.9 billion in 2025. - **Share-based pay is real money.** It was $2.4 billion in 2025, and I deduct $2.5 to $2.9 billion a year from non-GAAP profit in the Base. - **GAAP and non-GAAP differ widely.** GAAP net income was -$11.0 billion in the June quarter and -$3.7 billion in the March quarter. I did not trace the causes, so I do not rely on GAAP net income and I rest the valuation on operating income. ## Debt, shares and financing | Item (September 26, 2026) | Value | | --- | --- | | Cash and short-term investments | $54.0 billion | | Total debt | $50.1 billion | | Net cash | $3.9 billion | | Undrawn revolving credit | $15 billion | | Property, plant and equipment | $105.3 billion | | Goodwill and intangibles | $22.9 billion | | Equity attributable to common holders | $114.9 billion; $21.64 a share; $17.33 tangible | | Minority interests | $16.6 billion | | Shares outstanding | 5.31 billion | Net cash is only slightly positive after the $23 billion share offering completed in August 2026, and the factories are financed in part by partners who hold $16.6 billion of minority interests, which I deduct in full. The US government is also a significant shareholder, and the CHIPS Act agreement places some of its shares in escrow, which is a governance risk I treat as a score issue, not a number. ## Primary valuation: five-year earnings per share I project revenue and a non-GAAP operating margin to 2031, deduct share-based pay and a 12% tax rate and $0.5 billion a year for minority interests, divide by a share count that rises from 5.40 to 5.60 billion, and apply an exit multiple to 2031 earnings. I discount at 9% for 5.16 years. The Base value is **$31.94**. | Base case | 2027 | 2028 | 2029 | 2030 | 2031 | | --- | --- | --- | --- | --- | --- | | Revenue ($ billion) | 66 | 73 | 80 | 86 | 92 | | Non-GAAP operating margin | 13.5% | 16.0% | 18.5% | 20.0% | 21.0% | | Earnings per share after share-based pay | $0.95 | $1.37 | $1.85 | $2.19 | $2.49 | - **2027:** revenue of $66 billion. Four times the December quarter guidance midpoint ($15.5 billion) is $62 billion, and I add $4 billion because data center growth outweighs a PC market down about 10%, with the gross margin recovering to about 41%. This is my estimate. - **2028 to 2031:** revenue grows 11%, 10%, 8% and 7% to $92 billion, and the margin rises from 13.5% to 21% as the factories fill. A 21% non-GAAP margin needs Foundry losses to narrow, and management did not give a date for that. - **Exit multiple:** 20 times 2031 earnings, for a company still growing earnings about 14% a year, with a cyclical margin and a heavy capital bill. I would not pay more for it. - **Terminal share:** Intel pays no dividend, so the whole Base value is the exit value at the end of five years. That makes the multiple and the 2031 margin the entire answer, and I show the sensitivity. Primary value per share by 2031 earnings (rows) and exit multiple (columns): | 2031 earnings per share | 14 times | 17 times | 20 times | 23 times | 26 times | | --- | --- | --- | --- | --- | --- | | $1.80 | $16.15 | $19.62 | $23.08 | $26.54 | $30.00 | | $2.49 | $22.36 | $27.15 | $31.94 | $36.73 | $41.52 | | $3.20 | $28.72 | $34.87 | $41.03 | $47.18 | $53.33 | | $4.00 | $35.90 | $43.59 | $51.28 | $58.97 | $66.67 | The price of $59.97 needs 2031 earnings of about $4.68 a share at 20 times, or an exit multiple of 38 on my Base $2.49. Both are possible and neither is the base rate. ## Secondary valuation: the products on earnings, the factories on assets Intel's two halves have different problems, so I value them separately. For Intel Products I take 2027 operating income of $19 billion in the Base (the September quarter ran at $21 billion a year, and I assume the PC decline takes some of it), subtract my estimate of $1.6 billion of unallocated costs, tax it at 12% and apply 15 times. For the Foundry I use a share of the 105.3 billion of net factory assets: 0.4 times in the Base, 0.2 times in the Bear and 0.8 times in the Bull. I add net cash of $3.9 billion and deduct the $16.6 billion of minority interests. That gives **$48.79**. | Base case sum of the parts ($ billion) | Value | | --- | --- | | Intel Products after unallocated costs, tax and 15 times | 229.7 | | Foundry at 0.4 times net factory assets | 42.1 | | Net cash | 3.9 | | Minority interests | -16.6 | | Equity value | 259.1 | | Per share on 5.31 billion shares | $48.79 | I apply 0.4 times because the Foundry lost $1.85 billion in a single quarter and its customers beyond Intel itself are small. The 18A process is yielding at industry-standard levels and unit cost is down about 40% since the first quarter, which supports a value above zero. The 14A process has a 0.9 design kit out and risk production in 2027, with customers not named. It does not yet support a value at or above book. ## Growth diagnostic Revenue was flat for three years and then rose, with data center up 78% in the September quarter. That growth is cyclical and supply-driven, because the company says it cannot ship enough server processors. The PC business is the counterweight, with revenue guided down more than 20% in the December quarter. I classify the growth as real but narrow: one segment is growing fast and the other, which is the larger by revenue, is shrinking. ## Valuation triangulation - Primary (five-year earnings per share value): $31.94, weight 50%. - Secondary (sum of the parts): $48.79, weight 50%. - Divergence: 42% of the midpoint, above the 30% flag level. - Weighted Base: $40.37. The methods differ because they disagree about the Foundry. The earnings method embeds the Foundry's losses and its slow path to profit. The sum of the parts values it at 0.4 times net factory assets, or $7.93 a share, whatever it earns. I show both and the range from $31.94 to $48.79. Both are below the price, so the verdict does not depend on which is right. ## What is the market already pricing in? | Reverse valuation | Result | | --- | --- | | 2031 earnings per share that equate the price at 20 times | about $4.68 (my Base $2.49) | | Exit multiple that equates the price on my Base path | 38 times (my Base 20 times) | | Foundry value that equates the price at my Products value | about $101 billion, or 1.0 times net factory assets (my Base 0.4 times) | | Earnings multiple on my 2027 earnings | 63 times | | Return if the Base is right | -32.7% from the price | At $59.97 the market values the Foundry at about its book value, even though it loses about $7 billion a year at the operating line. That is the position of a company that expects the 14A customers to arrive. They may. The price already assumes it. ## Bear, base and bull scenarios | Case | Five-year earnings value | Sum of the parts | Blended | Versus price | | --- | --- | --- | --- | --- | | Bear | $5.26 | $24.18 | $14.72 | -75.5% | | Base | $31.94 | $48.79 | $40.37 | -32.7% | | Bull | $65.35 | $84.01 | $74.68 | +24.5% | - **Bear:** revenue flat at $62 billion in 2027 and 2028 and $68 billion in 2031, operating margin 8% rising to 10%, at 14 times. Products earn $14 billion, the Foundry is valued at 0.2 times factory assets. - **Base:** as described above. - **Bull:** revenue of $110 billion in 2031 at a 28% margin on 14A wins and a data center boom, at 24 times. Products earn $24 billion and the Foundry is valued at 0.8 times factory assets. The discount rate is 9% in all cases. The spread runs from $14.72 to $74.68, a ratio of 5 to 1, and the price sits between the Base and the Bull. The earnings-only Bear of $5.26 is harsh, and the sum of the parts holds it up. ## How the buy price is set Confidence is D, which has a default margin of safety of 55%. The two methods differ by more than 30%, so I add 5 points, for a required margin of 60%. | Method | Value | Buy price at a 60% margin | | --- | --- | --- | | Five-year earnings per share value | $31.94 | $12.77 | | Sum of the parts | $48.79 | $19.52 | | Weighted Base | $40.37 | $16.15 | The entry range is $12.77 to $19.52 and the conservative limit is $12.77. The price is 207% above the top of the range. The range is what I can defend as a margin of safety, not an expectation that the shares will fall there. The 52-week low was $32.89. ## Dividend and buybacks I found no dividend and no buyback. The company sold $23 billion of new shares in August 2026, so the share count is rising, and I model 5.40 billion shares in 2027 growing to 5.60 billion in 2031. ## Reasons to own Intel - Server demand is real. Data center revenue rose 78% in the September quarter, and management says supply is the limit through 2027 and into 2028. - The 18A process works. Yields are at industry-standard levels, and about one-third of client processor revenue already comes from 18A. - The balance sheet is no longer the immediate risk. Net cash is $3.9 billion with $15 billion of undrawn revolver, after the $23 billion share sale. - Intel Products earned $5.32 billion of operating income in one quarter. At 15 times, my Base values it at about $43 of the $60 share price on its own. - A real outside customer for 14A would change the Foundry from a cost to an asset, and my Bull case shows what that is worth. ## What could go wrong? - Guidance. December revenue and earnings are well below what the market expected, and the March quarter could carry another Israel hit and the deepest PC inventory correction. - The PC cycle. A 12% fall in 2026 and about 10% in 2027 hits the segment that earns $2.29 billion a quarter. - Foundry losses. $1.85 billion in one quarter, with no breakeven date given. - Capital spending. 2026 gross capex of about $20 billion rising in 2027 with no free cash flow, funded by debt and partners. - Dilution and partners. The $23 billion share sale and $16.6 billion of minority interests both stand ahead of the common holder. - Concentration of hope. The 14A customers are not named, so the Foundry thesis rests on a signature that has not been announced. - Volatility. The shares fell 45.2% in October and have lost about 47% since October 6, so a 25% move in either direction is ordinary. ## Management execution - Execution on the process is good: 18A yields reached industry-standard levels and unit cost fell about 40% in three quarters. - The 14A timetable is concrete (risk production in 2027, production in 2028), but no customer is named and the breakeven date is deliberately open. - The December quarter guidance missed expectations, partly from an accident, partly from PC demand, and management attributed it to both. - Capital allocation is the open question: spending rises strongly in 2027 while free cash flow is not guided positive and debt reduction is promised for the same year. That leaves little room. - The $23 billion equity offering in August 2026 removed near-term funding pressure, at the cost of dilution for existing holders. ## Stock Analyza scorecard | Business quality | Score | | --- | --- | | Moat and pricing power | 12/20 | | Economic return over cost of capital | 3/20 | | Balance sheet and resilience | 9/15 | | Earnings and cash quality | 5/15 | | Growth and runway | 9/15 | | Management and capital allocation | 6/10 | | Dilution and governance | 2/5 | | Total | 46/100 | The valuation score is **3 of 100**. | Valuation score | Score | | --- | --- | | Discount to the weighted Base (price 49% above it) | 0/50 | | Protection against the Bear (-75.5%) | 0/30 | | Market-implied asymmetry (Bull +24.5%, Bear -75.5%) | 3/20 | | Total | 3/100 | Business quality and valuation are shown separately and are not averaged. A turnaround that is half done, valued as if it were nearly finished, is a Reduce. ## Confidence score | Confidence | Score | | --- | --- | | Data and sources (results and call read through summaries; filing not read) | 3/5 | | Business predictability (turnaround, Foundry losses, PC cycle) | 1/5 | | Valuation robustness (42% divergence, one point deducted) | 3/5 | | Accounting transparency (large unexplained GAAP losses, partners' interests) | 3/5 | | Scenario dispersion (blended $14.72 to $74.68) | 1/5 | | Total | 11/25, grade D | The grade measures how well the model is identified, not the chance of a loss. A D means the value could be far from my Base in either direction, and the margin of safety is set accordingly. ## What I would watch from here ### Green - A named external customer for 14A with volume commitments. - Foundry operating loss narrowing below $1.0 billion a quarter. - December quarter revenue at or above $16.0 billion. ### Yellow - A March quarter guide below $15 billion. - 2027 gross capex above $30 billion with no financing plan. - Data center growth slowing below 10% from the September quarter. ### Red - Client revenue falling more than 25% from the September quarter. - A second manufacturing disruption. - A further equity or convertible raise. ## The three most important thesis breakers 1. No outside customer commits to 14A, and the Foundry is worth about 0.2 times its factory assets, as in my Bear case. 2. The PC market falls more than 10% in 2027 and takes the client margin with it. 3. Capital spending stays near $30 billion a year while operating cash flow stalls, forcing another raise. ## Stress test and independent check I recomputed every value, the sensitivity grid, the reverse valuation and the sum of the parts with a separate script. That checks the arithmetic, not the forecasts. | Input | Status | | --- | --- | | Revenue, margins, segment results, cash flow, guidance | Company September 2026 quarter results and call, read through press coverage and a data service | | Balance sheet, shares, history | Quarterly financial statements from a data service | | Price | Nasdaq close on November 2, 2026 from broker and data pages; the November 3 intraday price was $60.66, within 1.2% | | 2027 to 2031 revenue, margins, tax, share count, minority interest charge | My assumptions | | Foundry value | My assumption of 0.2, 0.4 and 0.8 times net factory assets | | Cause of GAAP losses in 2026 | Not traced | | 2027 capital spending | Management said it will rise strongly; I did not use a number | The weakest point is the Foundry multiple of 0.4 times, which moves the sum of the parts by about $8 a share for each 0.4 turn, and is a judgment and not a measurement. The strongest bull argument is a 14A anchor customer plus a data center cycle that outlasts 2027, which is the $74.68 Bull. The strongest bear argument is that the factories are worth little without outside customers and the PC market keeps falling, which is the $14.72 Bear. ## Final verdict: reduce at $59.97 The question is not whether Intel has a future. It is whether a company that guided earnings to $0.25 a share and still has the Foundry loss ahead of it should be priced as if the turnaround is finished. **Verdict: REDUCE at $59.97. Weighted Base $40.37, 32.7% below the price, cross-check $48.79, Confidence D (11/25). Required margin of safety 60%, buy range $12.77 to $19.52, conservative buy limit $12.77.** For an existing holder, the original cost is irrelevant. After a 58% fall from the high it is tempting to hold on, but the price still sits above my Base, and I would use rebounds to trim, not add. New money waits for a price at or below $19.52. The next tests are the 14A customer announcement and the guidance for the March quarter. ## More analyses on Patreon This analysis is free. Premium members get every in-depth analysis, the full archive and a vote on which stocks get analyzed next: https://www.patreon.com/stockanalyza ## Sources Primary sources are Intel's [investor relations site](https://www.intc.com/) (third quarter 2026 results and earnings call, October 29, 2026) and coverage of the call and the guidance in the financial press. The reference market price is $59.97, the November 2, 2026 Nasdaq close, from broker and data pages. Financial history and balance sheet figures come from [StockAnalysis](https://stockanalysis.com/stocks/intc/). The call was read through summaries, not the transcript, and the quarterly filing was not read. **Disclaimer.** This analysis is provided solely for research and educational purposes. It is not personalized investment, financial, legal or tax advice. Values are estimates, not forecasts or trading instructions. Intel is exposed to PC and server cycles, manufacturing execution, Foundry customer wins, capital spending, dilution, government and partner arrangements, and valuation risk. Investors can lose part or all of their invested capital. Method: Master Investment Analysis Framework v4.2. Approach: five-year earnings per share value with an exit multiple, cross-checked by a sum of the parts. Confidence: D/11. Data checks: passed with warnings. Open data gaps: quarterly filing, call transcript, cause of 2026 GAAP losses, 2027 capital spending. Conditional research only.