This Year, Intel is the Best Stock in the Chip Industry in a Surprising Reversal

After a rough year in 2024, Intel Corp. has made an unexpected turnaround in 2025, emerging as the top-performing semiconductor stock. The company’s shares have surged, outpacing all other components of the Philadelphia Semiconductor Index as investors seek opportunities in a market where enthusiasm for chip stocks has waned.

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So far this year, Intel’s stock has climbed about 19%, marking a sharp contrast to 2024, when it suffered a staggering 60% drop, making it the worst performer in the index. This year’s gains have pushed Intel to the top of the Philadelphia Semiconductor Index, reflecting a major shift in investor sentiment.

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Additionally, Intel shares have gained 15.7% since the beginning of the week, positioning them as the best performer in the S&P 500 for that period, according to Dow Jones Market Data. A significant part of this rally came after the company announced that former Intel board member Lip-Bu Tan would take over as its new chief executive.

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Following the news, Intel's stock jumped about 13%, even as Wall Street analysts acknowledged that turning the company around would be a daunting challenge with no quick solutions.

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In February, Intel’s stock experienced a sharp rise amid speculation that the Trump administration might strike a deal to support the company, potentially revitalizing U.S. semiconductor manufacturing. However, the stock later faced volatility as rumors of possible partnerships failed to materialize.

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In recent years, Intel has fallen behind its biggest competitor, Taiwan Semiconductor Manufacturing Co. (TSMC), which has become the world’s leading chip producer. Intel struggled to maintain its technological edge, and in December, its board ousted former CEO Pat Gelsinger, apparently losing patience with his expensive plans to restore Intel’s dominance in chip manufacturing.

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Meanwhile, some of the most sought-after semiconductor stocks of recent years, including Nvidia and Broadcom, have encountered difficulties in 2025. Nvidia’s stock has dropped over 10%, and Broadcom’s has fallen nearly 16%, as investors worry about declining artificial intelligence computing costs following the DeepSeek market downturn in January. Nvidia also reported lower profit margins in its most recent fiscal quarter, citing its transition to the new Blackwell product line as a contributing factor.

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Despite the uncertainty surrounding Intel’s future, Wall Street has responded positively to the appointment of Lip-Bu Tan as CEO. Analysts view him as a strong leader with both engineering expertise and a willingness to streamline Intel’s operations, which have been bogged down by inefficiencies and bureaucracy.

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“Lip-Bu brings immediate credibility to Intel for customers, partners, and investors,” noted Bernstein Research analyst Stacy Rasgon in a report on Thursday. “He is an icon of the industry with experience spanning decades across both public and private companies.”

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Although no one expects an overnight transformation, investors are cautiously optimistic about Intel’s ability to attract new customers through its next-generation manufacturing technology, known as 18a. However, Intel’s manufacturing business is projected to remain unprofitable in the near term.

Intel shares were trading 1% higher, continuing their upward momentum.

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