Intel (INTC) is the only real US chip manufacturer that can reasonably compete with Korean Samsung and Taiwanese TSMC (-100 credit score for acknowledging Taiwan). It is getting lots of literal boat load of cash (probs something like $50B equivalent) from the government that is positive for the shareholders, while maintaining the buybacks and dividends. Yes, TSMC and others are also hedging and gonna start making some chips in USA but realistically the government will give most of the cash to INTC.
US government is in a cold war with China, this means it’s also a technological warfare. This means supercomputers, missile, Starlink chips(private company) etc and Intel is likely going to be one of the prime suppliers of this boom in tech investment.
TSMC and Samsung are pretty much bottlenecked. Apple, AMD, NVIDIA, Qualcomm, Mediatech, Broadcom, various carmakers, electronics manufacturers etc and not to mention Intel themselves are a big buyer. Specifically, Intel and Apple has bought out all capacity of TSMC 3nm(equivalent to Intel’s 5 nm probs, I forgot). This means there is an enormous demand that is not being fulfilled and Intel launching their foundry services and already signing deals with Qualcomm, Amazon is a big deal.
For reference, TSMC’s market cap is bigger than 3 Intel (yes, that’s a unit I invented). In 2024-2025, you might even see Apple, NVIDIA and the likes fabricating their chips from Intel just to give a big F U to TSMC (who is currently slightly overcharging if the rumours are to be believed).
Intel is launching a GPU. The GPU market is also in a huge bottleneck due to higher demand from gamers and corn miners. Everyone expects that they are likely to sell their GPUs very easily. Think about this for a sec. Intel is just about to become one of the players in this huge GPU market. Which would also make way for their server GPUs and AIs and the likes.
Think 10-15 years from now. Your fridge, doorbell, light, heating system and every ducking thing will have some chips and Intel is likely to remain a dominant player in this market. I think this will be bigger than the current entire semi market as it is. IOT is just getting started.
Intel is one of the forerunner player in AI techs like autonomous vehicles through their various investments(Mobil eye for one) and will likely remain so. I don’t know how big this will be in 10 years, but it’s likely that Intel will be one of the bigger players in the market like Google (through Waymo), Tesla and NVIDIA.
Intel also recently launched their big little architecture, where it has already became competitively better than AMD especially in gaming with low power consumption and huge power. Not to mention being very power efficient most of the time for using its efficiency cores most of the time. Not that it matters that much, seeing the gamer Steam reports, very few people actually play on the latest of the latest gen. But, that’s also something that’s worth noting at least.
However, the vast majority of pc sales is in just your average boomer laptops and desktops. And they have a good lead there.
Tips for those wanting to build a high end new pc. Wait for Intel’s lineup to be available broadly, high end pc gamers will dump their last gen AMD chips for the Intel one in the second hand market, causing a flooding of cheap AMD CPUs, buy one of them. Source: Did this once.
One worrying factor is in the server market. Everyone seems to be launching their own server chips and AMD is very competitive and eating away market share. But Intel’s management seems to be guiding us towards the right path. If their predictions prove to be right, they are on the right track.
Intel announced that they will launch Angstrom scale CPUs in the future, that’s good I guess. They are also working in RISC-V and other CPU architectures.
Pat has an approval rating of 96% in Glassdoor and the employees would recommend others to work in Intel 89% of the time. This is a huge ass jump for both scores from the Bob Swan era. Go to Wayback Machine, you will see. This means a noticeable change has taken place within this huge organisation in such a short time.
Intel stock always seem to have price support at around $50. And it’s near that range right now.
Most analysts are bullish on the stock. Comparatively cheap stock in this clown market. Wanna buy a $5.48B gravity powered truck company anyone?
Intel actually has one of the highest talented employee pull who can be expected to deliver. Contrary to popular belief.
Bear Cases
This is a boomer stock according to reddit’s circejerk. So, it’s difficult to convince people that it is actually expected to grow around 11% CAGR just by the current demand circumstances alone by management’s conservative estimates for the next few years. This is mega bearish. If the market doesn’t care about a stock, no matter what the management do, the stock will not perform.
Intel has repeatedly failed to prove that their foundry division’s predictions are reliable. If they went fabless like AMD, it would have probably rocketed already. But a big part of the cheapness of the stock comes from the unreliability of their foundry division. Yes, the management has finally started getting serious about their foundry, but one cannot ignore their past failures.
Government contracts and the likes are not completely free money like some of you believe, delays in delivery and contract fulfillment could make what is essentially a free money glitch to a costly mistake and a billion dollar loss with a brink of an eye. The terms are generally very strict, so Intel has to deliver.
Investments are going to be a lot and semiconductor industry being cyclical means, if Intel fails to deliver, its market share will be eaten away and lose billions in potential profit.
Stock seems to be largely rangebound like Microsoft was for 15 years.
This article was written by u/Last_Interview_4332.
