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Intel's (NASDAQ: INTC) business has been in decline in recent years. The company was a king in the chip market, dominating central processing units (CPUs) alongside a lucrative partnership with Apple. However, an onslaught of new competition and the end of its relationship with Apple forced the company to rethink its business model.

Intel's shares are down about 28% in the last two years as the market noted Intel's headwinds. In response these challenges, Intel has launched a massive transformation that could make it an excellent long-term investment.

The tech giant is shifting its business to prioritize a digital foundry model, which will likely see it become the biggest semiconductor company in the U.S. and Europe. Meanwhile, Intel is investing heavily in the budding artificial intelligence (AI) industry.

So, here's why Intel is a no-brainer buy right now.

A leading recipient of the CHIPS Act

Two years ago, President Joe Biden signed the CHIPs Act, an initiative meant to expand the country's semiconductor manufacturing capacity by investing $53 billion into some of the world's top chipmakers. And funding is finally beginning to be dispersed.

On April 15, the Biden administration announced plans to award Samsung $6.4 billion to expand its manufacturing facilities in the U.S. Intel will likely follow soon. There is $8.5 billion earmarked for Intel, which will help it build four new facilities throughout the country.

The chips will make it easier and more cost-effective for U.S. tech companies to build a wide range of devices, including consumer products, cars, data centers and hardware meant for AI.

Intel said last year the shift to an internal foundry model will save it up to $10 billion by 2025 and will be its "most significant transformation in its 55-year history." Additionally, the tech giant revealed the change could increase efficiency and profitability, potentially allowing it to achieve 60% in non-GAAP (adjusted) gross margin and 40% in operating margin.

In addition to a significant shift in its business model, Intel is making AI a major focus in many of its products.

The AI market reached a valuation of just under $200 billion last year yet is projected to expand at a compound annual growth rate (CAGR) of 37% through 2030. Dozens of tech companies have pivoted their businesses to the high-growth segment in an effort to cash in on AI's massive potential. And Intel has followed suit.

Yet what sets Intel apart is its long history in the chip market, with its 55 years of experience as a chipmaker. In fact, the company is responsible for 63% of the CPU market despite the rise of rivals like Advanced Micro Devices.

Intel is slightly late to the AI party, with much of its past focused on CPUs. Meanwhile, graphics process units (GPUs) are predominantly needed to build AI models. Consequently, GPU leader Nvidia's business has exploded over the last year, without much competition. However, Intel plans to challenge Nvidia's market share with its own AI GPUs in 2024.

Last year, Intel unveiled its Gaudi 3 AI GPUs. The chips launched this April, with the company announcing they beat Nvidia's GPUs by 50% in inference and 40% in power efficiency.

Intel could profit from the AI market's tailwinds for years, making its stock an exciting option this month.

One of the best-valued AI stocks around

The Nasdaq-100 Technology Sector index is up around 40% in the last 12 months, driven primarily by excitement over AI. However, the market's projected growth indicates it's not too late to invest.

Meanwhile, chip stocks are some of the best ways to invest in AI, with these companies developing the hardware that makes the generative technology possible.

This chart shows Intel as potentially the best-valued AI chip stock. Intel's forward price-to-earnings and price-to-sales ratios are significantly lower than those of fellow chipmakers Nvidia and AMD.

These figures make Intel a bargain compared to its competitors. With the company transitioning to a digital foundry model and expanding its position in AI, Intel's stock is worth considering before it's too late.

Should you invest $1,000 in Intel right now?

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Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2025 $45 calls on Intel and short May 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.