Intel’s likely to still move higher. Here’s a ‘no-cost’ options strategy to play it
Intel’s earnings report beat on both the top and bottom lines, yet softer guidance sparked profit takers to sell the recovering chipmaker, pushing it down to $46, a more than 15% decline. The acute sell-off came after the former premier chipmaker rallied about 150% since January of 2025. I want to use options to establish a “no cost” long position as I believe Intel will continue to move higher, against the consensus. The most commonly cited average Street price target right now clusters in the $42–$48 range. Important to remember that in Q1 2025, the average analyst 12-month price target was approximately $28–$30 when INTC was trading under $20. What was the spark to turn around the floundering U.S. chipmaker? I would say Uncle Sam. After the Biden administration announced approximately $20 billion in subsidies (grants and loans) for Intel under the CHIPS and Science Act on March 20, 2024, the fallen chipmaker found a bottom. Under the Trump administration, the U.S. government invested $8.9 billion in Intel in August 2025 and, oddly, bought a 9.9% stake (433.3 million shares at $20.47 per share). Intel’s total funding received from the U.S. government under both administrations amounts to $11.1 billion, not $20 billion as previously pledged. I believe that Intel is an essential name to the U.S. economy and the “Soprano-like” equity ownership by our government pushes me into wanting to own this company for the long haul. Intel was the best performing holding in my Essential 40 Stock ETF $ESN in 2025. But there are significant headwinds remaining for Intel, and they are still in the back of the pack if we were on a chipmaker racetrack. Intel’s foundry services business, which domestically manufactures chips for both internal use and outside customers, is not yet profitable as of the latest data from fourth quarter 2025 earnings. I want to sell a put spread which will allow me to collect income and define my downside risk on Intel. I will add an extra leg to this spread to capture a back-n-fill higher in what is a volatile stock. I want to use the option premium I collect to buy an upside call which will allow me to participate in any resumed rally in Intel in Q1 for “zero cost”. The Trade Sold the 3/20/2026 $45 INTC put for $3.50 Bought the 3/20/2026 $40 INTC put for $1.25 Bought the 3/20/2026 $52.50 INTC call for $2.25 This spread costs $0 for an investor and an investor will participate in all Intel moves above $52.50 while defining risk to the downside in selling the $5 wide put spread. Intel was trading roughly at $45.50 DISCLOSURES: Long Intel and own this spread All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
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