Shares of Intel (INTC 2.29%) plunged 60.1% lower in 2024, according to data from S&P Global Market Intelligence. The semiconductor veteran ran into many issues last year, and the string of bad luck started many years ago. Complicating the picture even further, Intel is in the middle of an ambitious, costly, and difficult strategy shift.

Intel’s rough ride

Intel’s business performance was a mixed bag in 2024. The company missed the analyst community’s revenue and earnings targets as often as it exceeded them, and the upcoming fourth-quarter report will probably show far weaker results than the year-ago quarter.

The reasons behind Intel’s financial weakness are not simple. Sector rival Nvidia (NVDA 3.30%) is running away with the juiciest chip-supply deals in the booming artificial intelligence (AI) market. Longtime underdog Advanced Micro Devices (AMD 3.49%) has earned a historically large slice of important opportunities, such as server-grade chips and PC processors.

And some of Intel’s largest shareholders ran out of patience with a long and expensive turnaround effort, forcing CEO Pat Gelsinger out of the company. The large business expenses are still going on — Intel is spending as much as $100 billion on a five-year plan to support its third-party semiconductor manufacturing services for other chip designers.

So Intel’s bearish stock chart makes some sense. The company faces a plethora of challenges and is currently running under an interim management team, spending lots of cash on a very different business plan.

Betting big on America’s chip future

Here’s the thing: Intel is building a distinctly American pipeline for chipmaking services at a uniquely promising moment.

The American government isn’t getting along with its counterparts in Beijing, adding political tension with rising costs and regulatory restrictions to any business idea that involves semiconductors. At the same time, demand for leading-edge chips is at an all-time high. There’s the generative AI revolution, rising chip counts in modern cars (even the ones with classic internal combustion engines), and people are finally buying new smartphones again. In every crevice of this soaring demand picture, you’ll find a need for faster chips and more digital memory.

In my view, Intel is leaning into a fantastic growth opportunity at exactly the right time. The company can’t become an American giant of this crucial industry overnight, but is making great progress toward earning that title in the next couple of years. Taiwan Semiconductor Manufacturing (TSM 2.64%) is a trillion-dollar market darling for good reason, and Intel is stepping up to challenge this global giant on American soil.

Meanwhile, Intel’s stock trades at the bargain-bin valuation of 1.6 times sales or 20.3 times forward earnings estimates. AMD trades at 8 times sales, Taiwan Semiconductor has earned a 12.9x price-to-sales ratio, and Nvidia is soaring at 29.3 times sales. Intel’s stock price could multiply several times over and still look cheap in this group.

The chipmaking foundry division generated $4.4 billion of sales in the third quarter of 2024, building custom chips for tech titans like Amazon. That’s one way to take advantage of the AI boom without a leading AI accelerator among your own chip-design blueprints.

In other words, Intel is going down a profitable long-term path, but the stock is dirt cheap. It’s a no-brainer buy, in my opinion. In fact, I had to delay this article a few days because I bought a few more Intel shares last week.