No. of Recommendations: 3
Maybe not a falling knife anymore, unless viewed in slow motion over a long period of time. But INTC is down to half its peak, and has been a slow moving disaster now for the past few years. Decreasing revenue, decreasing EPS, product delays, and poor operational execution.
Today, it is making a real attempt to get a foundry business going, potentially coming out of the worst of its execution situation, and should benefit from the AI demand the chip sector is experiencing. Plus in the long term, there is an attractiveness to having a credible alternative to TMSC based in the US.
I really want to buy more, but have a hard time getting conviction on its business prospects. At a stock price of $34 though, is there enough risk mitigation to make investing even with a very uncertain future make sense? Thoughts?
No. of Recommendations: 6
Two years and a quarter after the original post, even after the pop over the last two months driven by USG and NVDA investment, INTC is still below the $34 share price I wrote about. But it’s the first serious sign that the thesis of a critical need for a US owned and based semiconductor company is playing out. INTC is the most credible option for that and there should be much further upside to the stock if business is directed to their foundry. The most challenging risk (customer willingness to sign on)now seems substantially mitigated. Technical risk on whether they can deliver chips needed to compete remains. But it feels like a much better time to take another look at INTC.
