Intel Corp. (NASDAQ:INTC) shares are falling this Thursday. Investors continue to take profits following a historic rally and a record high of $132.75 reached earlier this week.

Nasdaq futures are up 0.25% while S&P 500 futures have gained 0.31%.

Despite the immediate cooling, market experts suggest the underlying fundamentals are shifting in favor of the company.

The Rise Of Agentic AI

Dan Niles, Founder of Niles Investment Management, argues Intel is “still undervalued.” He believes the market is entering a phase centered on Agentic AI. Unlike basic chat tools, these systems execute complex, multi-step tasks.

Agentic AI requires 10 to 100 times more tokens than basic chat-based AI, Niles noted. This transition requires an orchestration engine to organize data, a task CPUs perform best. Consequently, hardware demand ratios previously at eight graphics processing unit (GPU) for every one CPU are moving toward one-to-one.

Expansion Of The Foundry Business

Intel recently secured a manufacturing deal with Apple Inc. (NASDAQ:AAPL). This move aims to reduce Apple’s reliance on Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM). While TSM maintains an edge in yields, Intel’s domestic push is gaining traction.

Niles expects Intel to lock in “pretty big foundry customers” by year-end, potentially including Nvidia Corp. (NASDAQ:NVDA) or Tesla Inc. (NASDAQ:TSLA).

Massive Market Forecasts

Reports peg the data center CPU total addressable market at $80 billion by 2028. This represents a 2.9 times increase versus 2021 levels. KeyBanc analyst John Vinh noted that near-term momentum favors Intel, driven by deployments at Amazon.com Inc. (NASDAQ:AMZN).

Navigating Sector Volatility

Niles acknowledged that semiconductor stocks are currently overbought. He warned that a 15% to 20% sector correction wouldn’t surprise him. However, he maintains strong long-term conviction due to the explosive compute needs of the AI buildout.

INTC Price Action: Intel shares were down 3.42% at $116.17 during premarket trading on Thursday, according to Benzinga Pro data.

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