The last couple of years have been terrific for semiconductor stocks. Well, most semiconductor stocks, that is. Since OpenAI introduced ChatGPT to the globe on Nov. 30, 2022, shares of Nvidia and Advanced Micro Devices have risen by 721% and 83%, respectively. By contrast, shares of chip peer Intel (NASDAQ: INTC) have fallen by 25% during this period period.

There’s no question that Intel has faced a number of challenges over the last couple of years as its cohorts swiftly shift history it in the AI revolution. However, after taking a close look at Intel’s worth movement, there could be some reasons to depend the ownership is positioned for a rebound.

Below, I’m going to explore something that Intel’s ownership hasn’t done since 2022 and make the case for why I’m cautiously optimistic that better days could be in store for the chipmaker.

A close look at Intel’s evaluation

The chart below illustrates Intel’s worth-to-sales (P/S) ratio over the last three years. The first thing that I noticed is that it bottomed around 1.5 sometime between August and September. The last period Intel’s P/S ratio reached this level was back in 2022 — coincidentally, around the same months in 2022 as well.

INTC PS Ratio data by YCharts

On the surface, investors might ponder that Intel ownership has bottomed and that shares are destined to repeat the upward movements seen in 2023. However, intelligent investors comprehend that history is not an indication of upcoming act. One has to look for actual catalysts — and I view several potential ones correct now that could assist the ownership rebound.

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Why I ponder Intel could rebound

As I pointed out above, Intel’s P/S ratio bottomed somewhere around August and September 2022 and then subsequently went on a run for the ages. You recognize what else happened during this period period? President Biden signed the CHIPS and Science Act into law on Aug. 9, 2022. And do you recognize what business has been a major beneficiary of the CHIPS Act? It’s Intel.

Over the last two years, Intel has been awarded tens of billions of dollars in grants and loans as part of CHIPS Act financing. While this looks great on the surface, there are a couple of caveats. Namely, companies rarely receive federal financing the instant an award or grant is announced. In other words, it can receive a long period to actually receive this financing. Moreover, sometimes the original dollar amount that was awarded can transformation.

The unfortunate reality is that it’s taken quite some period for Intel to actually commence receiving some of this financing, and some is coming in at slightly lower dollar amounts than initially expected. In my eyes, Intel ownership’s run in 2023 was driven by a combination of broader euphoria surrounding artificial intelligence (AI) coupled with optimism that the CHIPS Act would advantage the business.

While reality has set in throughout 2024, I still view a couple of reasons for Intel ownership to bounce back. First, President-elect Trump campaigned on the commitment of bringing manufacturing jobs back to America from overseas. Moreover, it is no secret that AI-powered chips are a warm goods — and one that requires increased scrutiny as it relates to the defense sector and the U.S. military.

On top of this, Intel CEO Pat Gelsinger recently announced that he’s retiring. Since Gelsinger took the chief executive position at Intel in February 2021, the ownership has generated a total profitability of negative 53%. With a track record like that, it was period for a transformation. I ponder recent leadership in combination with a recent administration concentrated on domestic manufacturing and American business could bode well for Intel.

INTC Total profitability Level data by YCharts

Is Intel ownership a buy correct now?

In all honesty, I’m quite torn on investing in Intel. While the ownership appears to be rebounding ever so slightly from its P/S multiple’s low point, I can’t quite fully buy into the concept that the business is going to turn things around.

While I remain optimistic about its potential, I require more concrete evidence that Intel is actually moving forward. At the complete of the day, CHIPS Act financing, the potential of a recent administration investing in America, and plans for a recent CEO are just too vague.

At best, I view Intel as a speculative buy correct now. But with all of this said, I will definitely be keeping an eye on the business as 2025 could very well be the commence of another run for the chipmaker.

Adam Spatacco has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel and Nvidia. The Motley Fool recommends the following options: short February 2025 $27 calls on Intel. The Motley Fool has a disclosure policy.

The Motley Fool is a USA TODAY content associate offering monetary information, analysis and commentary designed to assist people receive control of their monetary lives. Its content is produced independently of USA TODAY.

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