MW Why Intel's stock still offers compelling value - even after this year's 80% gain
By Philip van Doorn
Charles Lemonides of ValueWorks predicts Intel will achieve a much higher sales-growth rate than what Wall Street analysts expect
Intel's forward price/sales ratio is much lower than those of other chip makers, such as Nvidia, Broadcom and Taiwan Semiconductor.
The semiconductor industry has always been cyclical. And even though the hardware build-out to support generative artificial intelligence may last several more years, investors might be well served by considering value as they select stocks within this hot industry group.
Intel's stock was up 80% for 2026 through Tuesday. But the stock is still trading lower on a forward price/sales basis. Charles Lemonides, the founder and chief investment officer of ValueWorks, said this is the best play for investors wanting to jump on the AI trend with a broad-based semiconductor manufacturer.
ValueWorks manages about $375 million in individual accounts and a hedge fund in New York. You can see the strong long-term results for the firm's Long-Biased strategy here.
Intel still trades "at a huge discount to other chip manufacturers," based on forward price/sales ratios, Lemonides told MarketWatch.
Read: Intel's stock has been so strong that even skeptics have changed their minds
The iShares Semiconductor ETF SOXX tracks the PHLX Semiconductor Index SOX by holding all 30 of its stocks. Here is a look at valuations and growth projections for the largest 10 SOXX holdings, sorted by market capitalization, along with explanations of the data:
Company Forward P/E Forward price/ sales Two-year estimated sales CAGR through 2028 Two-year estimated EPS CAGR through 2028 Nvidia 21.8 12.4 26.2% 28.6% Broadcom 27.2 14.5 35.6% 34.7% Taiwan Semiconductor Manufacturing 21.7 11.1 23.3% 19.5% ASML Holding 35.4 11.8 15.2% 23.9% Micron Technology 5.4 3.4 9.5% -0.2% Advanced Micro Devices 33.9 8.8 35.3% 45.5% Intel 80.9 6.0 7.6% 75.3% Lam Research 34.4 11.8 14.6% 19.1% Applied Materials 31.3 9.1 12.9% 15.8% KLA 37.6 14.8 13.0% 17.3% Source: LSEG
A stock's forward price/earnings ratio is its price divided by the consensus earnings estimate for the following 12 months among analysts working for brokerage and research firms polled by LSEG. These are known as sell-side analysts. Intel's forward P/E is the highest on the list because of its low earnings projection for the next year. The company is in the midst of a long-term turnaround, which includes constructing several new semiconductor-fabrication facilities.
The forward price/sales ratios are also based on Tuesday's closing prices and consensus 12-month revenue estimates. On this basis, Intel is the second-cheapest stock on the list, with a forward price/sales ratio of 6.0, compared with valuations of 21.8 for Nvidia (NVDA), 27.2 for Broadcom $(AVGO)$ and 33.9 for Advanced Micro Devices $(AMD)$. "And I think Intel could be in as strong a position as those other companies, within 12 months," Lemonides said.
Micron is more narrowly focused than Intel, as it makes chips used in computer memory components. This has been an extraordinary industry for growth during the boom in data-center construction. Then again, the memory-chip business goes through its own boom-and-bust cycles.
"It has been hard to find ways to get into this imbalance in supply and demand" in the semiconductor sector, "without paying very full prices," Lemonides said.
"We are getting it in Intel today, and we were getting it for Micron a year ago," he said, adding that ValueWorks has been trimming its holdings in Micron.
Going further with the data table, the projected compound annual growth rates for the companies' sales are based on consensus calendar-year estimates from 2026 through 2028, as adjusted by LSEG for companies (such as Nvidia) whose fiscal years don't match the calendar.
For Intel, the projected sales CAGR from 2026 through 2028 is 7.6%, based on the consensus estimates. But Lemonides is way ahead of the sell-side analysts. "Can they get revenue growth of 15 to 20% a year for each of the next few years? Absolutely. And then a ton flows to the bottom line," he said.
Lemonides said Intel was likely to make significant improvements in yields from its newer manufacturing facilities. For a chip maker, yield refers to the percentage of units coming off the line that are working properly.
Micron has the second-lowest sales CAGR projection on the list and is the only company on the list for which 2028 earnings are expected to be lower than those for 2026. The underlying sales estimates for Micron include a 10% sales decline in 2028.
Read: The historic surge in chip stocks highlights Micron's valuation, and a related warning
Lemonides said the sell-side analysts had "no idea" when Micron's revenue would crest during the current cycle. He added that during previous industry cycles, the company's revenues had declined 50% from peak levels. When discussing Micron's low forward P/E valuation of 5.4, he said that "historically they have gotten down to 3.5 times earnings during ultimate peaks in previous cycles."
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-Philip van Doorn
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April 22, 2026 11:05 ET (15:05 GMT)
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