Forget Intel: This AI Chip Kingpin Is the Real Way to Ride the Generative AI Gold Rush

Intel (NASDAQ: INTC) has been 1 of the hottest semiconductor stocks connected the marketplace implicit the past six months, rising an unthinkable 135% during this play and crushing the 47% gains registered by the PHLX Semiconductor Sector index. The stock's emergence is the effect of improving capitalist confidence, stemming from Chipzilla's technological progress, its cost-optimization efforts that are boosting the bottommost line, and a coagulated equilibrium expanse bolstered by investments from the U.S. government, Nvidia (NASDAQ: NVDA), and SoftBank.

However, Intel's latest results marque it wide that it inactive has immoderate mode to spell earlier it tin capitalize connected the secular maturation of the semiconductor market.

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Intel released its fourth-quarter 2025 results connected Jan. 22. Revenue fell 4% twelvemonth implicit twelvemonth to $13.7 billion, portion non-GAAP net accrued by 15% to $0.15 per share. The numbers were amended than expected, but Intel's guidance sent the banal packing.

Chipzilla guided for break-even net successful the existent quarter, compared to Wall Street's expectations of $0.06 per stock successful adjusted earnings. The guidance points to a year-over-year diminution successful net from past year's level of $0.13 per share. The company's gross volition stay stagnant from the year-ago period. The banal fell 12% successful aftermarket trading owed to the mediocre bottom-line guidance.

Intel attributed this weakness to a proviso shortage. The institution notes that its gross from the information halfway and artificial quality (DCAI) conception "would person been meaningfully higher if we had much supply."

Management noted that its proviso constraints volition beryllium "most acute" successful Q1. Intel, however, believes that proviso volition commencement improving successful the 2nd 4th of 2026 and proceed to amended successful the 2nd fractional of the year.

As Intel is trading astatine a whopping 88 times trailing net and 85 times guardant earnings, it's casual to spot wherefore investors pressed the panic button. Though absorption sounded upbeat astir request for its AI chips successful some the idiosyncratic machine and information halfway markets, a diminution successful net wasn't going to beryllium good with investors considering the stock's exorbitant valuation.

If you're looking to capitalize connected the generative AI golden unreserved successful the semiconductor market, it would beryllium amended to instrumentality a look astatine different spot elephantine that exercises large power implicit the proviso chain.