The Stock Tripled. The Chip It Sells Is Still Losing.

Here's the thing nobody chasing Intel right now wants to sit with. The stock is up 222% this year. The product that's supposed to justify any of it just lost another six points of market share.

That's the whole tension in one breath. Mercury Research put Intel's slice of the server CPU market at 66.8% for the first quarter, down from 72.8% a year before. Servers are the crown jewel, the chips that run the world's data centers, and Intel is bleeding them to AMD one quarter at a time. Not crashing. Bleeding. The slow kind that's easy to talk yourself out of noticing while the share price does something the opposite of slow.

And look at how AMD is winning, because the texture matters. Its EPYC chips made up only about a third of the units sold. But it pulled in 46.2% of the revenue. People are paying a premium for the AMD part. Lisa Su called it four straight quarters of record server CPU revenue, growth over 50% with both cloud and enterprise buyers leaning in. When customers cheerfully pay more for your rival's chip than for yours, that's not a market-share blip. That's a verdict.

Intel's defense, more or less, is that it can't make enough. Lip-Bu Tan told investors demand is running ahead of supply, especially for Xeon. Which sounds like a good problem until you remember the customer who can't get a Xeon doesn't sit and wait. They buy the EPYC sitting on the shelf. Supply you can't deliver is just demand handed to the guy across the street.

So why is the stock at 222%? Because the turnaround story is real on its own terms. Earnings are projected to jump 159% this year. The 18A process is in production. There are reports of Apple, of Google Cloud, of Musk wanting the next node for his Texas fab. Tan's pitch that agentic AI needs more CPUs is not nothing. I get why people bought it. I get why they're still buying it.

But the number I can't get past is 904. That's what Intel trades at against trailing earnings. Nine hundred and four times. The Nasdaq sits at 43. Even the forward multiple of 139 is a steep climb. The Fool ran the kind math anyone holding should run themselves: give Intel a generous premium, 50 times earnings three years out, and you land around $112 a share. That's below where it trades now. The best-case fair-value math points down.

Which brings me to the person I keep thinking about. Two years back somebody on WallStreetBets put a $700,000 inheritance from their grandmother into Intel, days before a 26% one-day collapse. The story went viral as a punchline. He held. He's probably whole now, maybe way up, and the same crowd that laughed is piling in behind him on the same logic. That's the part that gnaws. The story that felt like a cautionary tale is now the bull case. Buy the wreck, wait, get rich. It worked once. The 22-year-old comp-sci student with twenty grand of it doesn't think he's buying at 904 times earnings. He thinks he's early.

He's not early. He's late to a stock priced as if the server losses already reversed. They haven't. AMD's next-gen parts are coming and Intel's own boss says it still can't ship enough of the chips it's already losing on.

The rally and the business are telling two different stories. One of them is lying, and the chips don't usually lie.