Intel stock jumped 28% in August, adding about $24 billion in market value. The rally was driven by reports that the US government is considering acquiring up to a 10% stake in the chipmaker, along with plans for a $2 billion investment from Japan’s SoftBank.

However, the surge pushed Intel’s valuation to levels not seen since the dot-com era: the stock is trading at 53 times projected earnings, the highest since early 2002. Analysts note that such a high multiple reflects expectations of significant government backing but also raises doubts about the company’s long-term stability.

According to Bloomberg, Intel is expected to generate more than $1 billion in profit over the next four quarters, after reporting a $1.3 billion loss in the previous year. By comparison, between 2018 and 2021 the company averaged over $20 billion in annual profits.

Analysts remain cautious: fewer than 8% recommend buying the stock, while about 80% suggest holding. The average price target of $22 remains below the current $25.31 level. Despite optimism around new CEO Lip-Bu Tan, his cost-cutting strategy raises questions about Intel’s ability to maintain technological leadership.