$INTC Q2 2025: A Look at the Turnaround through the lens of recent "Smart Money" Buys (Greenblatt, Zhu, Gabelli).

Apart from recent Q2 2025 numbers, why talk about one of the most pitched stocks here?

Because some of the sharpest minds in the business are quietly building positions. We're talking about Joel Greenblatt (the Magic Formula guy), Mario Gabelli (legendary value investor that someone on this sub actually told us to take a look at), and Helen Zhu of Nan Fung Trinity (a major Hong Kong-based family office and ex Chief Investment Officer of Goldman China). Granted, however, that Greenblatt and Gabelli have very small positions (and Greenblatt doesn't hold a very concentrated portfolio. The fact that INTC doesn't hit any of the ROIC or EV/EBITDA metrics that Greenblatt pitches though, suggests he probably views this as a special situation.).

But the biggest tell is the new CEO, Lip-Bu Tan. This guy is a legend in the semiconductor world. He's an MIT-trained nuclear physicist who became a billionaire VC and turned Cadence Design Systems into a 30x-40x monster. He recently bought $25 million of INTC stock with his own cash on the open market, and his pay package is almost entirely performance-based. He only gets paid big if shareholders get rich first. (see hyperlinked our longer-form analysis which goes more in-depth. Here we focus on deconstructing the Q2 2025 loss and comparative valuation metrics).

When a guy with this track record makes a bet this big, you have to ask: What does he see that the rest of us are missing?

Deconstructing the Q2 2025 Loss: A Turnaround Obscured by Restructuring

On July 24, 2025, Intel reported its second-quarter results, and the headline figures seemed to validate every bear's worst fears. The company posted a GAAP net loss of $2.9 billion, translating to a loss per share of $(0.67).However, a deeper analysis of the income statement reveals that this loss is not the result of a collapsing core business but rather the consequence of deliberate, and arguably necessary, strategic actions taken by a new management team intent on "clearing the decks."

The GAAP loss was almost entirely driven by nearly $3 billion in charges that were not part of the company's original guidance for the quarter.These can be broken down as follows:

• $1.9 Billion in Restructuring Charges: This charge, which impacted GAAP EPS by $(0.45), is primarily associated with a significant corporate downsizing. Intel has moved to reduce its core workforce by approximately 15%, a painful but decisive step toward creating a leaner, more agile organization with a lower future operating expense run-rate.
• $1.0 Billion in Impairments and One-Time Costs: The company also took an $800 million non-cash impairment charge for excess manufacturing tools and equipment that have no identified re-use, along with an additional $200 million in one-time period costs.These charges are a recognition of past capital allocation mistakes and over-investment, not a reflection of current operational weakness. Together, they impacted non-GAAP EPS by approximately $(0.20).

When these specific, non-recurring items are accounted for, a very different picture of Intel's operational performance emerges. The non-GAAP loss per share was only $(0.10), a figure that, while still negative, is an order of magnitude different from the headline GAAP number.

Multi-decade Low Valuation Multiples

• Price-to-Book (P/B) Ratio: Intel is currently trading at a P/B ratio of approximately 0.86 to 0.89. In essence, the market is saying that Intel's assets are worth less than what is on the books. Yet, these are the very assets the U.S. government has deemed critical national infrastructure and is subsidizing with billions of dollars from the CHIPS Act...
• Price-to-Sales (P/S) Ratio: Intel's P/S ratio stands at a modest 1.58. While not as dramatic as the P/B ratio, it becomes incredibly compelling when viewed in the context of its peers.

|| || |Company|Ticker|Market Cap ($B)|Price/Sales (P/S) Ratio|Price/Book (P/B) Ratio| |Intel|INTC|~$84.52|1.58|0.86| |AMD|AMD|~$278.29|10.11|4.82| |Nvidia|NVDA|~$4,240|28.93|50.53| |TSMC|TSM|~$1,260|11.85|7.95|