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Valuing Intel Like Its Peers Yields A $210 Price Target

Jun. 04, 2020 5:16 PM ETIntel Corporation (INTC)62 Comments
Arne Verheyde profile picture
Arne Verheyde


  • AMD and Nvidia continue to trade at astounding multiples. The market seems to like their growth and potential.
  • Lagging behind is Intel, despite having the same growth and potential for future continued growth.
  • Valuing Intel like these two peers at a 35 P/E ratio yields a $210 price target.
  • While perhaps unrealistic given the current ~$60 price, the potential reward far outweighs the risk.

Investment Thesis

When compared to its peers/competitors AMD (AMD) and Nvidia (NVDA), Intel (NASDAQ:INTC) is valued very cheaply at a 13x forward P/E and 11.5x trailing P/E. This is despite Intel benefiting from the same tailwinds as the former two companies.

While multiple expansion is all but guaranteed, it suggests the potential reward could be much bigger than the risk, when taking a position in the company. This thesis echoes a recent article by another author.

Comparison to Nvidia

A recent SeekingAlpha article covering Nvidia states the following:

Nvidia's transformation into a data-centric computing platform is in full swing. The closure of the Mellanox acquisition deal should provide added momentum to Nvidia's data center business, which was already growing at more than +50% (3-yr CAGR).

Nvidia's AI-powered GPU's in conjunction with Mellanox's high-performance computing chips & high-speed networking components could make Nvidia the top choice for next-gen data centers. As a result, I expect data center revenues to overtake gaming at Nvidia in the next couple of years.


According to my valuation, Nvidia is still undervalued, leaving room for further upside.

It is not difficult to conceive writing a similar article, but replacing Nvidia word for word with Intel, as indeed Intel has been in a (similar) data-centric transformation for several years now. Further replacing Mellanox with Barefoot Networks (Intel's 2019 acquisition to answer Nvidia's), and data-centric revenue overtaking PC revenue (which indeed was the case in Q1), instead of gaming/GPU revenue in Nvidia's case, strengthens the point.

In other words, Intel’s AI-infused CPUs in conjunction with its broad accelerator offerings such as FPGAs, Habana ASICs for AI (another 2019 acquisition) and Intel’s discrete GPUs, and even further enhanced by Intel’s Optane and 3D NAND memory and storage and Intel and Barefoot Networks’ silicon photonics and switches, will all but let Intel remain the top

This article was written by

Arne Verheyde profile picture
With an engineering background, looking for companies with expertise to be well-positioned for growth and leadership.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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