Forget Intel. Buy This Tech Stock in September Instead.

Intel (NASDAQ: INTC) has been one of the top-performing stocks this year. Over the past year, Intel stock has returned 335%, and year to date it has gained 188%.

The stock surged 10% this week on the news reported by multiple outlets, including DigiTimes, that Intel was raising the prices of some of its central processing units, or CPUs, by 10% in October.

This comes after the semiconductor stock raised them in the first quarter, and did so again in July on certain products. Further, one of its rivals, Qualcomm (NASDAQ: QCOM), implemented a double-digit price increase in July.

The reported price hike, which Intel has not yet itself confirmed, may be due to several factors, including surging demand for CPUs, driven by the rise of agentic artificial intelligence (AI). In the second quarter, it had its highest revenue increase in more than 15 years. But it may also be due to higher costs for other components, like memory and storage. In addition, Intel's management is intent on improving its margins, so raising rates on certain higher-margin CPU chips will help that along.

Image source: Getty Images.

Investors responded positively to the price hikes, as shares soared to over $106 per share when the market closed on Wednesday, Sept. 9.

But investors should be cautious about piling in right now.

Intel is a bit too pricey

The major reason for concern about Intel is its valuation. After a strong run-up over the past year, Intel stock is trading at an unwieldy price-to-earnings (P/E) ratio of 88, with a forward P/E ratio of 57.

Some of that is skewed higher because Intel has not been consistently profitable in recent years. But the 10% ownership stake taken by the U.S. government in August 2025 has set the stock on a positive trajectory after it tanked some 60% in 2024.

That high valuation may be causing some investors to cash out, particularly since the outlook for Q3 calls for adjusted earnings to decrease from $0.41 per share in Q2 to $0.38 per share in Q3. That's in part due to higher-than-expected estimates on capital expenditures. Intel increased its capex outlook to $20 billion for 2026 and expects to spend significantly more than that in 2027 to meet increasing demand for its chips.

Intel is a stock to hold for the long term, but investors may want to wait for a better entry point to buy in. They might look for an entry point as low as Sandisk's (NASDAQ: SNDK).

Sandisk is a buy in September

Sandisk has been one of the hottest stocks in the world over the past year or more. In the last 12 months, it has gained a staggering 2,195%, and year to date it has returned an eye-popping 615%.

Sandisk has ridden the AI wave as AI computing requires its solid state storage drives, NAND flash storage drives, and memory cards, which are used to store and provide access to data for data centers and AI computing. Sandisk is smack-dab in the middle of a memory and storage supercycle that has created staggering demand and massive pricing power.

The supercycle will end when supply infrastructure catches up to demand, but there is some debate as to when that will be. Some say it could peak in 2028, perhaps longer, but it is just a projection at this point.

But Sandisk is sold out for 2026 and has a massive $93.9 billion in contracted revenue over the next four to five years, thanks to long-term deals Sandisk has been signing with its customers. That could help it sustain strong earnings even beyond the supercycle peak, whenever that is. But what really stands out about it now, aside from its huge backlog and surging revenue, is its low valuation.

Sandisk is currently trading at 23 times earnings and just 8 times forward earnings. That is a testament to its massive earnings power. It also means Sandisk remains a strong buy in September.

Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intel and Qualcomm. The Motley Fool has a disclosure policy.