Key Points
The stock still sold off after a record-setting quarter.
Intel's stock still has a lot of success built into it.
Intel (NASDAQ: INTC) has been a monster stock so far in 2026. It has risen by around 150%, but it's still well below its peak. Intel's stock has plummeted around 35% from its all-time high, set just a few weeks ago at the end of June.
Since then, Intel has reported some incredible figures, including one that broke a nearly 15-year-old record. That points to an imminent turnaround and could justify some of Intel's incredible performance over the past year.
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Investors are likely taking gains
Intel is a true turnaround story. Last year, rumors were swirling about its semiconductor foundry business being shut down due to a lack of clients. However, thanks to an investment from the U.S. government and Nvidia, that hasn't happened, and Intel appears to be turning the corner.
This was confirmed by a stellar Q2 earnings report in which Intel delivered 25% revenue growth -- its best since 2011. That's a clear sign that Intel could finally be turning the corner, and a closer look reveals that its foundry business grew at 31%.
That's exactly what investors were looking for, but it will take several quarters before the market declares Intel's turnaround complete. Intel's stock is still highly valued, and it will take a few years to return to a reasonable valuation.
INTC PE Ratio (Forward) data by YCharts
At 60 times forward earnings and 46 times next year's earnings, the stock price has accounted for nearly all of Intel's short-term success. As a result, investors are likely taking some gains off the table amid the current sell-off. There's nothing wrong with that, as Intel's stock has been a monster winner over the year since the investment from the U.S. government and Nvidia was announced.
But does that mean now is the time to buy the dip? I don't think so.
There is currently negative sentiment surrounding the AI build-out. That may flip after big tech earnings conclude, but with the market worried about an AI overbuild, I don't see this sentiment ending anytime soon, and it could lead to a further sell-off in Intel's stock.
Intel just delivered the biggest news for investors in over a decade, reporting rapid growth, and the stock still sold off. That should tell you a lot about the sentiment behind Intel's stock, and I think smart investors are staying patient until the sell-off stabilizes.
Keithen Drury has positions in Nvidia. The Motley Fool has positions in and recommends Intel and Nvidia. The Motley Fool has a disclosure policy.