Is Intel Corporation (INTC) Stock Undervalued or Overvalued?

Intel Corporation currently reports negative trailing twelve-month (TTM) earnings, making traditional earnings-based valuation metrics less applicable. Instead, its Price-to-Sales (P/S) ratio stands at 8.5x. This multiple is often considered more relevant for Intel given its substantial investments in manufacturing and strategic transformation, which impact near-term profitability and free cash flow. The company's P/S ratio is notably above its historical median and the broader semiconductor industry average, suggesting that the market is anticipating significant future growth and a successful turnaround. Recent results show promising signs, with Q2 2026 revenue up 25% year-over-year, driven by a 59% increase in Data Center and AI revenue and 13% growth in Client Computing. Intel's strategic pivot to an independent foundry model, aiming to capture demand for AI processing and custom silicon, is a key driver of investor sentiment, despite the foundry business currently incurring operating losses. While the company faces intense competition and its x86 CPU market share has seen declines, the P/S multiple reflects expectations for its long-term strategy, technological advancements, and potential for future margin expansion to materialize.