Saad Ullah
Intel just pulled off something that shouldn't be possible - a major technical breakout while sporting some truly awful financials. The stock hit $35.50 after months of sideways action, and it's all thanks to Uncle Sam's checkbook and whispers about NVIDIA getting cozy with the struggling chipmaker. It's a perfect example of how government money can make investors ignore what the balance sheet is screaming.
Technical Picture Looks Sweet
In a recent tweet, TrendSpider pointed out that the U.S. government and NVIDIA (NVDA)havereportedlytakenastakeinIntel(NVDA) have reportedly taken a stake in Intel ( NVDA)havereportedlytakenastakeinIntel(INTC) .The weekly chart tells a clear story. After getting hammered earlier this year from the $37 level, Intel spent months grinding sideways before this recent explosion higher. Breaking above that consolidation range is textbook bullish action, and momentum traders are eating it up. The question is whether this move has legs or if it's just hot air.
The Fundamentals Are Brutal
Here's what the numbers actually say about Intel right now:
- Forward P/E of 53.76 (translation: massively overpriced)
- ROE at -18.6% (shareholders are losing money)
- ROA at -0.9% (assets aren't generating returns)
- Dividend suspended (bye-bye income investors)
Compare this to AMD or NVIDIA and it's not even close. Intel is bleeding money while competitors are printing it. Under normal circumstances, these metrics would send any stock into the basement.
Why Nobody Cares About the Ugly Truth
The market has decided that fundamentals don't matter when you've got the government in your corner. Billions in CHIPS Act subsidies are flowing Intel's way as Washington tries to rebuild domestic chip production. Add in rumors that NVIDIA might be willing to work with Intel on AI chips, and suddenly everyone's betting on a comeback story. It's classic "buy the narrative, ignore the numbers" behavior.
This breakout could keep running if the momentum holds. But Intel's real test comes down to execution - can they actually use all this government cash to build competitive chips again? The chart says buy, the fundamentals say run. Smart money is probably taking profits while the getting's good, but momentum chasers might keep this party going a bit longer.
Bottom line: Intel's rally is pure speculation dressed up as a turnaround. Trade it if you want, but don't mistake government subsidies for a sustainable business model.
Saad Ullah
