Intel Just Delivered Its Best Quarter in Years, But There Are Still Better AI Stocks to Buy

Intel Just Delivered Its Best Quarter in Years, But There Are Still Better AI Stocks to Buy Rich Duprey Sun, July 26, 2026 at 5:30 PM GMT+2 4 min read INTC Artificial intelligence has become a market that rewards execution, not promises. Investors have poured hundreds of billions of dollars into companies building AI infrastructure, yet leadership can change quickly when technology shifts or customers choose different suppliers. That makes earnings season especially important because it separates companies making real progress from those still telling turnaround stories.

Intel's (INTC) latest quarterly results showed meaningful progress across the businesses that matter most for AI, helping explain why the stock has climbed 322% over the past year even after retreating 27% from the all-time high it reached last month. Even so, the numbers suggest investors may still find better opportunities elsewhere in the AI ecosystem. More News from Barchart Mark Cuban Says His Black Amex Got Declined Buying a $140,000 Bottle of Champagne After Mavs Win in Miami — 'Can I Please Spend Some Money?

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com Intel's AI Businesses Finally Delivered Intel's second-quarter earnings release painted a picture few investors would have expected a year ago. Revenue, profit, and guidance all exceeded Wall Street expectations, but the bigger story was where that growth came from. The company's AI-related businesses produced standout performances, particularly its foundry operations.

Intel's advanced 14A manufacturing process appears to have found its footing after CEO Lip-Bu Tan warned last year that Intel might abandon the node altogether if it failed to land a major outside customer. That milestone matters because Intel's manufacturing ambitions have long been viewed as the company's biggest wildcard. Winning external customers validates years of investment while giving Intel another way to participate in the AI buildout beyond selling processors.

Intel's turnaround has also become one of the market's biggest surprises. After years of disappointing execution, INTC stock has become one of the S&P 500's ($SPX) best performers over the past 12 months. Even after the recent pullback, shareholders remain far ahead of where they started the year.

Granted, strong execution deserves recognition. Intel has made measurable progress in restoring credibility, and its manufacturing roadmap looks far healthier than it did just 12 months ago. Story Continues The Valuation Story Isn't as Favorable as It Looks Intel is still trying to establish itself as a leader in AI while competing against companies that already dominate key markets.

Surprisingly, investors are paying a premium for that potential. Metric Intel Nvidia AMD Broadcom Forward P/E 163. 0x 23.

6x 87. 1x 37. 7x Price-to-Sales 9.

8x 23. 8x 26. 0x 29.

6x Price-to-Cash Flow 47. 0x 43. 9x 106.

3x 50. 2x PEG Ratio 0. 67 0.

40 1. 58 0. 74 Those figures create an interesting contradiction.

Intel appears cheaper on a sales basis because its businesses extend well beyond AI chips. Yet its 163-times forward earnings multiple and 47-times cash flow valuation suggest investors are already pricing in years of successful execution. Nvidia (NVDA), meanwhile, trades at a fraction of Intel's forward earnings multiple and a fraction of its free cash flow multiple despite remaining the undisputed leader in AI accelerators and software.

Growth relative to earnings—the PEG ratio—tells a similar story. Intel's 0. 67 looks attractive in isolation, but Nvidia's 0.

40 implies investors are paying even less for its expected earnings growth. That isn't an argument that Intel is overvalued at any price. Rather, it suggests the valuation gap has narrowed enough that market leaders may now offer comparable—or even better—risk-adjusted returns.

Leadership Still Matters in AI Intel deserves credit for changing the narrative. The company executed well, stabilized its manufacturing strategy, and demonstrated that its foundry ambitions remain viable. Yet Intel is still playing catch-up across many AI markets.

Nvidia continues to dominate AI accelerators, while companies such as Advanced Micro Devices (AMD), Broadcom (AVGO), and Taiwan Semiconductor Manufacturing (TSM) occupy leadership positions in other critical parts of the AI supply chain. History shows that technology transitions usually reward companies setting the pace rather than those trying to close the gap. Intel may eventually earn a larger share of the AI market, but investors are already paying a valuation that assumes much of that success.

Key Takeaway In short, Intel's second quarter was precisely what shareholders wanted to see. The company exceeded expectations, strengthened confidence in its 14A manufacturing process, and proved its turnaround is becoming operational rather than theoretical. Regardless, investing is about comparing opportunities, not simply celebrating good news.

With Intel trading at a premium relative to Nvidia's discount, the market's AI leader arguably offers the more compelling risk-reward profile. Intel deserves consideration as part of a diversified semiconductor portfolio, but investors looking to maximize long-term AI exposure may still find better value by owning the companies already leading the race. On the date of publication, Rich Duprey did not have (either directly or indirectly) positions in any of the securities mentioned in this article.

All information and data in this article is solely for informational purposes. This article was originally published on Barchart.