ServiceNow (NOW) Stock: The 5-for-1 Split and Why I'm Not Buying the Hype
Let's cut right to the chase. Intel’s stock is up 111% since its low in April. One hundred and eleven percent. For a company that’s been the tech world’s equivalent of a lumbering dinosaur for the better part of a decade, that number feels less like a market indicator and more like a typo.
I’ve been watching this unfold from my desk, surrounded by the ghosts of tech-hype past, and I gotta say, this one feels different. It feels… desperate. Wall Street is so starved for a comeback story that it’s willing to project its hopes and dreams onto the first legacy chipmaker that strings together a single decent quarter.
But a single decent quarter doesn't erase years of fumbles. It's like seeing a washed-up quarterback throw one good pass in a preseason game and immediately hearing whispers about a Super Bowl run. Give me a break.
The AI Magic Show
So, what’s fueling this rocket ship? Two letters: A.I.
CEO Lip-Bu Tan gets on the earnings call and says the magic words—"demand for artificial intelligence processors"—and suddenly everyone forgets the fundamentals. It’s the new corporate cheat code. Your numbers are mediocre? Just say "AI" three times into a mirror and watch your market cap inflate. The fact that Intel's actual data center and AI segment revenue was down 1% seems to be a detail nobody wants to talk about. How does that work, exactly? You're seeing "healthy demand" but selling less? Is this some new kind of quantum accounting I'm not aware of?
Then you have Nvidia dropping $5 billion into the pot. This is being spun as a massive vote of confidence. A co-sign from the king of AI himself. But I see something else. I see a calculated move. Nvidia isn't a charity; they're an apex predator. Is this an investment to help a competitor find its footing, or is it a way to gain leverage and influence over a potential future supplier who is currently on their knees? It feels less like a partnership and more like a leash.
And this isn't even touching on the other investments from SoftBank and the government. It feels like everyone is trying to prop up the old champion, hoping he’s got one last fight in him. But all the money in the world can’t fix a broken process.
A Look Under the Hood Reveals an Engine on Fire
Once you get past the AI hype and the big-name investments, the picture gets ugly. Fast.
Intel's 3% revenue increase is anemic. It's a rounding error. That's not growth; that's life support. And the profit? It came from cost-cutting. That means layoffs. They're on track to slash their workforce by over 20% by 2025. You don't fire a fifth of your company when you're innovating and winning. You do it when you're bleeding out and need to stop the hemorrhaging. This isn't a sign of strength. No, 'strength' is the wrong word—this is a sign of managed decline.
The real disaster, the five-alarm dumpster fire, is the 18A chip process. This is supposed to be Intel’s silver bullet, the 1.8-nanometer process that puts them back on top. But CFO Dave Zinsner admitted the production yields are still below industry standards. That’s corporate-speak for "we're making a whole lot of expensive coasters." They're burning through silicon wafers and getting a lower proportion of usable chips than their rivals. It’s like a master baker who suddenly can’t make a decent loaf of bread, but keeps promising the next batch will be perfect. Meanwhile, TSMC is already shipping 3nm chips and getting ready for 2nm next year. Intel is playing a game of catch-up where the finish line keeps moving further away, and offcourse they expect us to believe they'll magically leapfrog everyone by 2027.
Then again, maybe I'm the crazy one. Maybe the market sees a brilliant turnaround strategy that my cynical brain can’t process. Or maybe, just maybe, Wall Street is a casino where the chips are fueled by pure, uncut hope, and reality has long since left the building.
The company's own outlook is a wet blanket. They're guiding for lower revenue and lower profit in the next quarter compared to last year. So, the stock is valued at 88 times earnings for a company that is actively telling you it expects to perform worse in the near future. This whole thing just doesn't add up.
Hope Is Not a Business Strategy
Look, I get the appeal of a comeback story. Everyone loves an underdog. But buying Intel right now isn't an investment in a turnaround; it's a bet on a miracle. You're buying a narrative, not a business. You're buying the hope that they can fix years of deep, systemic problems before their rivals lap them for a third time. And while others debate Up 111%, Should You Buy Intel Stock Right Now?, at this valuation, that’s not just a risky bet—it’s a fool’s errand.