Of the high-flying tech stocks from the PC era, few have struggled to recover their lost prestige more than Intel (NASDAQ:INTC). As PCs have declined in importance, the company has evolved to become a leading provider in areas such as data centers, the Internet of Things (IoT), and self-driving cars. Despite this strategic pivot, Intel stock continues to struggle.

In fairness, Intel has suffered from a series of self-inflicted wounds this year. Also, other factors such as the trade war and a sudden glut in chips have hurt the semiconductor sector as a whole.

Still, through these struggles, Intel has remained stable. Also, with the company’s valuation and its move to redefine itself, a buying opportunity in INTC has begun to emerge.

Intel Lags Peers

Most PC-era stocks struggled in the early part of the decade. Devices such as smartphones and tablets took much of the internet traffic. Many even questioned the relevance of PCs. Companies such as Apple (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) flourished while Intel and its PC-era peers fell out of favor.

Many of its peers later made a comeback. However, Intel has yet to see this recovery. It also has experienced a challenging year. The exposure of long-time security flaws brought embarrassment to the company early this year. The sudden resignation of its CEO caused further turmoil.

Further, its peers have found more success in new initiatives. Microsoft (NASDAQ:MSFT) became a major player in cloud computing. It now battles Apple and Alphabet to hold the world’s largest market cap.

Its perennial second-place rival from previous decades, AMD (NASDAQ:AMD), has bested it in many regards. Even with its recent decline, AMD’s price-to-earnings (PE) stands at about 50. This compares to Intel stock currently holds a PE ratio of about 11.

The latest setback comes as Northland Capital Markets downgraded INTC from hold to underperform. Northland cited trade tensions, lost market share to AMD, and slowing data center demand as reasons for the lowered rating. They also mentioned Robert Swan, the new CEO, saying they did not know whether he is “Lord Nelson or Captain Queeg.”

The Buy Case for Intel stock

However, despite new CEO and other concerns, I believe the market has unduly punished this stock. For one, an 11 PE seems low when annual income growth will average an estimated 10.53% this year. Yes, Intel’s profit growth will slow to a paltry 1.1% in 2019. However, that will come in ahead of both AMD and Nvidia (NASDAQ:NVDA) in the same period. Despite this, AMD and Nvidia trade at much higher multiples.

Moreover, Intel has remained unusually stable. During the fall, the stocks of both AMD and Nvidia fell deep into bear market territory from early October highs. Thanks in no small measure to its avoidance of the crypto market, Intel stock trades close to early October levels.

Furthermore, INTC has moved on from the PC-era. Its data-centered business units will soon overtake the PC segment regarding revenue. Within the next three years, data center revenue alone will likely pass PCs on the revenue front.

As for other segments, 5G technology should increase the importance of IoT. Additionally, the acquisition of Mobileye will help Intel to become one of the more important chip companies in the self-driving car market. Given its valuation and growth prospects, I see the analyst downgrade as a buying opportunity in Intel, not a reason to sell.

The bottom line on Intel stock

Intel stock has become a buy despite the turmoil inside the company and a recent downgrade. Yes, security flaws and problems with top management have weighed on INTC stock. Admittedly, Intel also fell behind AMD in many key areas, and it remains unknown how well the new CEO will properly sail this ship.

However, Intel has also made improvements and key acquisitions that have allowed the company to redefine itself. For these reasons, it will likely follow its PC-era peers in regaining respect. Given both valuations and growth prospects, investors should sell AMD and buy INTC.

As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting.