Is Intel the Comeback Stock of the Decade?

For years, investors had written off Intel (NASDAQ: INTC). Known as the world's largest semiconductor company for decades, innovation slowed as the rise of the smartphone diminished demand for PCs.

During that time, one-time peers and rivals like AMD and Taiwan Semiconductor (TSMC) took a technical lead, and the GPU and artificial intelligence (AI) innovations of Nvidia seemed to leave the chip company vulnerable.

A turnaround began when former Intel engineer Pat Gelsinger became CEO. He put forth a plan to restore Intel's technical lead and turn it into a third-party foundry. Now, under current CEO Lip-Bu Tan, the chip stock has made its comeback a reality.

Nonetheless, it is not the "biggest comeback." Here's why.

Image source: The Motley Fool.

Intel today

Indeed, Intel is again a contender in the chip industry for many reasons.

For one, the third-party foundry is arguably the next big catalyst for Intel stock, as Tan's success with delivering on the 18A process node has made Intel better able to compete with industry leader TSMC. Other factors, such as rising demand for CPUs in data centers, played into Intel's hands.

Moreover, money from the CHIPS Act and Tan's later relationship with President Trump brought critical government funding for these very expensive upgrades. Ultimately, Intel's advancements could make the U.S. less dependent on Taiwan for these critical chips.

The size of the comeback

Consequently, Intel has experienced a massive comeback since soon after "Liberation Day" last April, when it fell to a low of $18.84 per share. Today, it sells for around $130 per share at the time of this writing, a near-sevenfold increase over the past 14 months.

However, stocks such as Robinhood Markets and Super Micro Computer have grown more than that in percentage terms. Also, the title of biggest comeback in the S&P 500 (SNPINDEX: ^GSPC) belongs to Carvana, which reached a split-adjusted $0.74 per share in late 2022 and now sells for close to $70 per share, a 95-fold increase.

Carvana's market cap is only about $50 billion after that growth, meaning that move created significantly less wealth than Intel, whose market cap rose from around $82 billion to approximately $650 billion. Nonetheless, other stocks not in comeback mode created larger market cap gains than Intel, making it a significant but not top-ranked comeback.

Assessing the comeback in Intel

Intel's comeback in the 2020s is not the biggest, but it is arguably the most notable one. While Carvana's comeback returns far outpace those of Intel, it may be more meaningful than Carvana's recovery from a macro perspective.

Intel began the decade far behind rivals in an industry it once led. However, Gelsinger's vision and Tan's execution made it again one of the more consequential chip companies.

Amid the sevenfold growth in share prices in just over a year, Intel again makes the U.S. much more competitive in the CPU market and chip manufacturing.

Hence, while Intel's comeback did not lead to the largest returns in percentage terms, the revival in chip manufacturing may ultimately be more meaningful for investors and, arguably, for the U.S. at large.

Will Healy has positions in Advanced Micro Devices. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.