Semiconductor stocks have been on fire in the past year. But you certainly wouldn’t know it by looking at Intel (NASDAQ:INTC). In the past couple of years has been, the performance of INTC stock has been the epitome of mismanagement.

The company had a dominant market share in one of the biggest growth markets in the world. Yet somehow, Intel managed to bumble around and fall behind competitors in its technology.

Intel repeatedly delayed product rollouts and even potentially may have to rely on third-party chipmakers for the first time in the company’s history.

As a result of all those mistakes, Intel is hemorrhaging market share to Advanced Micro Devices (NASDAQ:AMD) and other competitors.

Still, despite all of Intel’s missteps, INTC stock is trading at just 11.1 times forward earnings estimates. If the company can finally, finally get its act together in 2021, the upside for investors could be massive.

INTC Stock Value Case

Bank of America recently hosted an Intel bull-bear debate. Analyst Vivek Arya said the Intel bulls made several compelling arguments that Intel is a value at current levels.

First, Intel has the opportunity to overcome its 7 nanometer chip production issues by working with partners. Arya anticipates Intel will announce a production partnership with Taiwan Semiconductor (NYSE:TSM) on its fourth-quarter earnings call in mid-January.

Intel could also choose to shift its focus away from 7nm and focus on next-generation 3nm chips to potentially launch in late 2022 or 2023. That strategy would have a severely negative impact on Intel’s near-term numbers. But it could potentially shift critical investor sentiment if the market could look past the company’s current problems.

INTC stock bulls also said a shift in management could gain back investor confidence. At the same time, the U.S. government could come in with some form of assistance given the critical nature of Intel’s business, particularly its manufacturing business.

Activist investor Dan Loeb also recently took a $1 billion stake in INTC stock. Loeb immediately called for the company to explore strategic alternatives, including potential divestments of non-core businesses.

Loeb’s guidance could help light a fire under Intel’s management and get investors excited about Intel again.

Value Trap Case

Of course, there is also a clear case to be made that INTC stock is simply a value trap. One of Intel’s biggest problems is that the semiconductor industry is all about timing.

Arya says any initiatives that would be big enough to turn the Intel aircraft carrier around and point it back in the right direction would be difficult and take a long time.

At the same time, competitors like AMD, Nvidia (NASDAQ:NVDA), Marvell Technology (NASDAQ:MRVL) and others will continue to leave Intel behind.

Specifically, Arya says AMD is innovating faster and providing more features at lower price points than Intel. Perhaps most importantly, AMD is gaining credibility among Intel’s customers.

In addition, while Intel still has a dominant 90% share of the server CPU market, Arya says the markets in more advanced parallel processors, artificial intelligence accelerators, data processing units and other products are much more competitive.

Nvidia is the leading player in many of those next-generation markets.

Finally, Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) have both started producing their own in-house ARM-based chips. Other Intel customers may soon follow suit, which creates yet another headwind for the company.

How to Play It

After hosting the bull-bear debate, Arya said he is personally in the INTC stock value trap camp.

“While strength in PCs/servers can buoy the stock in the [near-term], share loss will be more noticeable in 2H21 when comps likely get tougher,” Arya says.

Bank of America has an “underperform” rating and $45 price target for INTC stock.

I believe Intel may continue to underperform high-flyers like Nvidia and AMD. But I certainly wouldn’t sell or short the stock trading at 11.1 times forward earnings and 2.6 times sales.

Forget recovering lost market share or getting back to earnings and revenue growth. At that valuation, all Intel needs to do is stop the bleeding and it could easily double in a matter of months. General Electric (NYSE:GE) shares are up 77% in the past three months simply for stopping its bleeding.

In the meantime, INTC stock pays a solid 2.5% dividend to reward investors for their patience.

For now, I’d say Intel is a show-me stock. There’s no good reason to buy it today. But keep it on your watch list because Intel certainly won’t go down without a fight.

On the date of publication, Wayne Duggan did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.

Wayne Duggan has been a U.S. News & World Report Investing contributor since 2016 and is a staff writer at Benzinga, where he has written more than 7,000 articles. He is the author of the book “Beating Wall Street With Common Sense,” which focuses on investing psychology and practical strategies to outperform the stock market.