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Intel: Vindication - Small Today, More Tomorrow

Dec. 06, 2018 11:15 AM ETIntel Corporation (INTC)71 Comments


  • Intel's strong operational performance is not being reflected in its share price.
  • Will Intel be increasing its buybacks at year-end?
  • Intel is undervalued however a rational investor looks at it.
  • Looking for more? I update all of my investing ideas and strategies to members of Deep Value Returns. Get started today »


Intel (NASDAQ:INTC) is a reasonable company, with a market leading-position in the CPU market. It has largely succeeded in pivoting away from a PC-centric business towards becoming a data-centric business. While Intel has its faults, its share price remains unjustifiably undervalued.

Market Sell-Off - Vindication

During the market-wide sell-off of the past few days, Intel's valuation has remained stable. Furthermore, particularly during the past 2 months, with tech in general, seeing a lot of weakness in share prices, Intel has actually outperformed the Nasdaq. Why?

It is my contention that value investing has started to make its way in underpriced pockets of opportunity in the market. Given that Intel had already made for a difficult investment during the early part of 2018 - least of all, by having no permanent CEO to head the company - now as the market starts to sell-off and Intel has been so underpriced for so long, it would not surprise me to see Intel's valuation better reflected its medium-term opportunities.

A Different Story - Diversified Growth

Here is a fact: Hidden amongst the news from Nvidia's (NVDA) sell-off post earnings comes the reality that its datacenter segment was up 58% YoY for Nvidia.

Obviously, Nvidia's datacenter opportunity is very much smaller than Intel's, but it goes to show still more solid evidence that this sector's tailwinds are strong and not showing any signs of slowing down.

Moreover, many analysts underestimated just how quickly Intel would manage to lessen its hold on the PC-centric market and pivot strongly towards the now, more promising data-centric opportunity.

However, even more insightful, is that although many industry commentators continue to talk about the PC-market decline, in Q3 2018, Intel delivered solid growth in its PC-centric business which was up 16% YoY. In fact, the solid growth posted in the quarter allowed Intel to not

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