The fact that Intel's management have chosen to spend two decades flushing that amazing free cashflow down the M&A toilet instead of fixing their workplace culture and getting their design house in order is what Pat Gelsinger needs to fix.
Intel is definitely in a hole (that they watched being dug below them and did nothing...), but they can get out. They have plenty of time to do so. The only real problems to overcome are their own internal culture and the sheer difficulty of single-digit-nanometer manufacturing. And the second one is easier.
Don't count them out yet. (But do laugh at them. Because they definitely deserve it, and it just might motivate them.)
Look at IBM; while Big Blue was once seemingly omnipotent and they've since fallen from that position, it's still a double-digit billion company with over 300k employees. It's not as big (relatively speaking) as it once was, but it sure didn't die either.
Other companies have died, such as Digital Equipment, but that was the result of 1) a massive paradigm shift in computing and computing equipment (introduction of "personal computing"), and 2) some pretty bad business decisions (not just failing to get a hold of the PC market). Thus far, I'm not really seeing 1) happen, and 2) alone probably won't be enough to completely kill intel, just cripple it temporarily.
Mobile? No, thanks, those are peanuts. Cheap/home PCs? Nah, either. PC builders very sensitive to prices? The don't want them. And slowly they are being sweetly cornered in the top market of the very expensive servers with very juicy margins, but feeling how the small dogs keep bitting up. Suddenly ARM wants to build for cheap servers, and AMD has a chip that also fights for that top market.
Personally I think strategic M&A is a far more intelligent use of cash and credit than share buybacks and dividends.
Intel has arguably made at least a few solid acquisitions. AMD is buying Xilinx a few years after Intel bought Altera, which tells us that the Altera acquisition couldn't have been totally misplaced -- AMD has the benefit of hindsight with which to evaluate its own acquisition. Mobileye seems to be well positioned as conventional automakers are beginning to offer mainstream EVs.
Perhaps the problem is that there are certain higher-order functions (M&A, stock buybacks) that should generally be conducted only when the lower-order functions (core business) are firing on all cylinders. Companies have finite resources, and executives have limited time and energy, that shouldn't be starved away from the core business unless absolutely necessary.