Intel (INTC -3.45%) stock has had a remarkable 2026. Shares sit near $124 as I write, up about 236% from the $36.90 they closed at to end 2025.

With three months left, the chipmaker is on pace for its best calendar year in more than four decades. No full year since at least 1981 comes close.

But Intel's history after strong years isn't encouraging. Before 2026, the stock's five best years since 1981 were 1996 (up 131%), 1983 (up 117%), 2003 (up 106%), 2023 (up 90%), and 1987 (up 89%).

Four of the five years that followed were losses. In the year after each, the stock climbed 7% (1997), then fell 33% (1984), 27% (2004), 60% (2024), and 10% (1988).

Still, these drops didn't all have the same cause, and I think the causes matter more for 2027 than the streak itself.

Image source: Intel.

Three drops, three causes

The 1984 slide lined up with a turn in the chip cycle. Intel's revenue climbed 45% that year and its earnings jumped 71%, both records.

But according to Intel's 1984 annual report, the strong market for its chips collapsed around year-end. Customers who had been stockpiling Intel products in short supply quit buying and ended up with too much inventory. In 1985, Intel's revenue fell 16%, and earnings per share were a cent.

The 2004 drop looks like it was mainly about valuation. Intel's earnings per share climbed 36% that year, to $1.16 -- and the stock fell anyway.

Shares went from around 38 times earnings at the end of 2003 to about 20 times earnings a year later. In other words, the business grew, and investors just paid much less for every dollar of profit.

The 2024 plunge, though, was about the earnings themselves. Intel's non-GAAP (adjusted) earnings per share swung from $1.05 in 2023 to a loss of $0.13 a share in 2024. Its loss under standard accounting rules was much bigger, at $4.38 a share.

Last year broke the pattern

Of course, the most recent strong year doesn't fit. Intel shares gained 84% in 2025, just outside the top five, and 2026 has been much better.

But 2025 started from a very different place. After 2024's 60% fall, the stock finished the year at around $20, its lowest year-end close since 2008.

Outside money then came in near those prices. In August 2025, the U.S. government agreed to invest $8.9 billion in Intel stock at $20.47 per share. A month later, Nvidia agreed to invest $5 billion at $23.28 per share.

The business followed in 2026. Intel's revenue fell 4% year over year in the fourth quarter of 2025. Growth returned at 7% in the first quarter of 2026. By the second quarter, revenue was up 25% year over year, at $16.1 billion. Adjusted gross margin rose to 41.8% in the second quarter from 29.7% a year earlier. And adjusted earnings per share came to $0.42, against a loss of $0.10 a year before.

Is 2027 set up like 2004?

Falling earnings, the 2024 problem, arguably aren't the issue now. Management's third-quarter forecast calls for revenue of $15.8 billion to $16.8 billion, implying growth of around 19% year over year at the midpoint. Its guidance for $0.38 in adjusted earnings per share compares with $0.23 a year before.

But a turn in the chip cycle is tougher to rule out. CEO Lip-Bu Tan said this month that demand for Intel's central processing units is so strong the company can serve only around 50% of its customers. A shortage like that is when customers can end up ordering more than they need, as Intel learned in 1984. If demand eases, those orders could fall fast.

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NASDAQ: INTC

Intel

Premium Feature

Moneyball Superscore

70/100

Today's Change

(-3.45%) $-4.39

Current Price

$123.00

Key Data Points

Market Cap

$650BMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.

Day's Range

$122.84 - $126.93

52wk Range

$32.89 - $142.35

Volume

97.7M

Avg Vol

108.8M

Gross Margin

39.05%

And valuation looks like a bigger problem now than it was heading into 2004. At the end of 2003, Intel's price was around 38 times the earnings it had already reported. Today, it trades near 60 times earnings, and those are adjusted earnings expected for 2027.

The share price also arguably assumes foundry wins that haven't happened yet. Intel hasn't yet announced a major outside customer for 14A, its next manufacturing process.

In the end, 2025 showed that a great year doesn't have to be followed by a bad one. But that exception began with the stock near $20 and the business near its low.

This time, the business is improving, and the stock price already assumes it keeps improving. That setup looks more like 2003 heading into 2004 than 2025 heading into 2026, and Intel's earnings could keep rising next year while the stock goes down. I wouldn't count on another year like this one.