Intel's (NASDAQ: INTC) comeback thus far in 2026 has been eye-popping. With backing by the U.S. federal government, which took a nearly 10% stake in the company, Intel is making strides with advances in both its artificial intelligence (AI) and chip offerings. The stock has surged dramatically in response, rising about 170% in 2026 already. Tech investors are wondering if this is the real deal or if Intel's stock is overheated.
The optimism and bull case is difficult to discount. Intel appointed Lip-Bu Tan as its new CEO in early 2025. Since then, Tan has focused on cost-cutting and efficient execution. Intel's data center revenue also grew 22% in the first quarter of 2026 compared to the same period last year.
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The equity stake the U.S. government took in Intel is also a strong signal that the tech company will lead the country's efforts to reduce its reliance on foreign semiconductor companies. Intel also recently announced its expanded partnership with Alphabet to advance Google's AI infrastructure ambitions.
With all the good news, it's important to note Intel is still losing money. In its latest quarterly earnings, Intel reported a net income loss of $4.28 billion. The company still needs to diversify its major customer base as well. Intel's stock is also extraordinarily expensive right now, with a trailing P/E ratio of over 900.
It's hard to justify buying Intel at this highly inflated price. If the stock comes back down to earth and leadership can continue executing its turnaround, Intel will be worth a second look. However, Intel trading at $90 or more per share feels more like overextended hype than actual fundamentals.
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