Entering text into the input field will update the search result below

Intel Still Has No Answer To AMD

Mar. 09, 2021 5:04 PM ETIntel Corporation (INTC)AAPL, AMD, SSNLF, TSM166 Comments
Damon Verial profile picture
Damon Verial


  • Intel's latest desktop chip is underwhelming; this has been the story of Intel chips in the past few years and continues to be a headwind for the company.
  • With an increasing amount of bearish catalysts and few bullish ones, INTC will likely trend downward.
  • The upcoming earnings report will be a reminder to investors that Intel is stagnating among peers that are flourishing.
  • I recommend selling OTM weekly calls up to earnings.
  • Looking for a portfolio of ideas like this one? Members of Exposing Earnings get exclusive access to our model portfolio. Learn More »

Last time we discussed Intel (NASDAQ:INTC), we looked at the CES 2021 announcements, primarily Intel’s new laptop CPUs and its outsourcing of its 7nm chip production. Again, we have new developments: performance reports on the company’s newest desktop CPU, the Rocket Lake Core i7-11700K. Here, I want to add more details to my bearish thesis on this company.

Performance Problems

The Rocket Lake Core i7-11700K is hardly much better than last year’s Comet Lake Core i7-10700K. From UserBenchmark results, we can see that overclocking just the RAM of the Comet Lake processor would produce a faster system than the Rocket Lake at only 70% the price. In addition, due to the design being a backport of the 10nm architecture on a 14nm chip, the small performance boost comes at a power cost, and this is during a time when other chip designs are outperforming Intel’s at extremely low power costs (see Apple’s M1, for example).

Intel seems focused on moving its chips forward via small but hardly significant performance increases at significant cost increases, a strategy that simply does not make sense when Advanced Micro Devices (AMD) is making large performance increases at small costs. The only advantage I see here is on the supply side: While all its competitors are moving to 7nm and 5nm during a time when supply for these productions are constrained, Intel is moving upward to 14nm, which has essentially no supply pressures. The main advantage here is that Intel will be able to produce processors in a market in which AMD processors are consistently sold out.

But I wouldn’t be bullish here. Being bullish due to this – likely temporary – demand/supply divergence is like being bullish on knock-off dolls from China for the reason that Tickle-me Elmo dolls are sold out. I don’t

Exposing Earnings is an earnings-trading newsletter (with live chat). We base our predictions on statistics, probability, and backtests. Trades are recommended with option strategies for the sake of creating high-reward, low-risk plays. We have 89% accuracy for our predictions in 2019.

-Upcoming Earnings Plays: AZO, ORCL, MU, CAMP, LQDT

Check out my methodologies in these four videos.

If you want:

  1. A definitive answer on which way a stock will go on earnings...
  2. The probability of the prediction paying off...
  3. The risk/reward of the play...
  4. A well-designed options strategy for the play...

...click here to see what Exposing Earnings members are saying.

This article was written by

Damon Verial profile picture
Damon Verial is a statistical analyst who uses his skills to research stocks, options, and investment strategies. In addition, Damon is the writer of Copy My Trades, a trade-alert, subscription-based newsletter, available at his personal website. He is also the writer of Exposing Earnings, an in-depth earnings prediction service here on Seeking Alpha. . Damon makes his living as a gap trader, an earnings trader, and an interday trader. In his free time, he writes for Seeking Alpha, where he focuses on seasonal investing, market timing, and earnings analyses. . Damon has written several successful stock analysis algorithms, including algorithms that can predict gap closure, intraday patterns, and news overreactions. They will soon be publically available for subscribers. .Damon’s undergraduate education was in statistics and mathematics at the University of Washington; his graduate education was in psychology at National Taiwan University. He currently lives in Fukuoka, Japan.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a short position in INTC over 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.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.