Intel shares have climbed more than 40 percent in September, pushing the 2026 gain to roughly 250 percent and making the chipmaker the fifth-best performer in the S&P 500. The rally has lifted the stock to 84 times this year's earnings estimates and 62 times next year's, multiples that sit far above the semiconductor industry's historical range.
The valuation disconnect
The foundry business, which Intel is trying to turn around, trades at a fraction of these multiples at its closest peer. Taiwan Semiconductor has averaged about 23 times earnings over the past decade. For Intel to reach that level without a share-price decline, earnings would need to nearly triple from 2027 estimates. On the product side, Nvidia, a more direct comparator for computing hardware than AMD, whose own history is clouded by profitability swings, currently trades at 28 times earnings.
What history suggests
The source argues that valuations this extended rarely hold. Either Intel delivers earnings growth that justifies the premium, or the market rerates the stock lower. The author frames it as a warning sign that could limit future returns, and points investors toward Taiwan Semiconductor and Nvidia as more reasonably priced alternatives.
The missing catalyst
Notably, the September surge arrived without fresh news on foundry progress or product roadmaps. The rally appears to have been driven by momentum rather than fundamental developments, which makes the current multiple even more detached from observable catalysts.
What to watch
The next test comes when Intel reports whether foundry execution and product cycles can close the gap between today's price and the earnings power implied by it. Until then, the stock is pricing in a turnaround that has yet to materialize in the numbers.