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Intel: Flowery Promises

Aug. 03, 2021 3:10 PM ETIntel Corporation (INTC)AMD, ASML, ASMLF, NVDA54 Comments
The European View profile picture
The European View


  • If investors want to know the current market sentiment towards Intel, all they have to do is look at the company's P/E ratio compared to its peer group.
  • What we see here is that Intel is simply missing out on the current boom on an operational level.
  • The only hope is a small business unit and the flowery promise that everything will be better in 2025.

Entrance of The Intel Museum in Silicon Valley.
JHVEPhoto/iStock Editorial via Getty Images


If investors want to know the current market sentiment towards Intel (NASDAQ:INTC), all they have to do is look at its P/E ratio compared to its peer group. With an almost single-digit P/E ratio, Intel

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The European View profile picture
Runner of the TEV Blog | Private InvestorI am a long-term oriented investor and in my early thirties. I hold a law degree and a doctorate in law and love investing and talking about my and others' investments. I regularly write about my research and investments on various investor platforms and the TEV Blog. **My articles represent my opinion only and in no way constitute professional investment advice. It is the responsibility of the reader to conduct their due diligence and seek investment advice from a licensed professional before making any investment decisions.**

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such 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.

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Comments (54)

wow&wow profile picture
"Intel: Flowery Promises"
"the flowery promise that everything will be better in 2025."

What else could be presented?

For those who haven't seen what happened at Computex 2021:


But, it has been pumping $billions Q after Q.
This is a treatise on the psychology of the market more than on the merits of Intel.
The market buys "hope" and "promise". Money flows to the best story, not the best company. Intel's story has been poor. But the next chapter in the story is going to be a game changer. Intel is by far the best positioned company to benefit from the US government's intervention in the chip industry. Taxpayer money is about to be funneled into on-shoring foundries and fabs. Who do you think is going to get the lion's share of that handout? When that story hits the front page, INTC will gap higher and never look back.
C185 profile picture
That's an accurate synopsis of the flood of bearish INTC articles by people that have no clue about the tech.

This interview of a couple of industry analysts (one worked at AMD, the other for both AMD and Nvidia) and Sanjay Natarajan - who recently returned to Intel to lead process technology development - is worth the half hour.


The interviewer's comment near the end of the interview (transcribed below) is an accurate analysis of the disconnect between Wall Street talking heads and Intel's technology position.

[It's such an interesting moment because what the financial analysts and financial markets are doing and the way they're talking about Intel is so markedly different from the way the technologists and technology analysts are talking about Intel. Who's right we'll see, but it's an interesting moment where people are making their career bets - I mean Sanjay you came back to Intel at this moment - people are making their financial bets with different information and for different reasons and for me what you said earlier about being at parity - I think a lot of people have misunderstood what that means - that you're talking about process technology, You're not talking about product. You're not saying, "Oh we're going to be behind AMD until 2024". People actually think Sanjay that's what's being communicated, so I'm glad we get moments like this to clarify at least what Intel is saying.]
omdguy profile picture

If a single dollar goes to Intel as part of this sham to onshore chip manufacturing there should be a revolt! Remember that this is a company that was fined for bribing OEM's not to carry AMD products, who had a CEO who sold all his shares before the massive security issues were announced, who has been caught faking demos at shows, and who is overall truly despicable in terms of their customer relations, and their marketing department!
Mercurios1 profile picture
@joemrogers Global Foundries? TSMC, Samsung in an effort to get them to build more fabs in the US?

Intel for sure is in the mix but the government would not hand it all, or even the lions share to one company. Thats not how government programs work.
And than u must cosider the alternatives and the risks they carry. You have described nicely a limited downside with a substantial upside if Gellsinger delivers. Peers r priced as though they can keep up the pace for years.

I am undecided- happy with my AMD but if I had to pick one atock from this industry knowing the market will be closed for a decade- INTC would definitely be it.
mk1992 profile picture
@Natan Euler 'Limited downside'? Semi???? You don't know semi then. Pull out any semi stock since the beginning of time and watch how far the valleys were below the peaks. Then you come back here and tell me again there's 'limited downside'.
@mk1992 that is an empty statement which neglects many crucial factors. Not all semis are equal in quality, stratigic importance, financials etc'.

If u can buy just one stock in the industry and the market closed for ten years, which would it be?
mk1992 profile picture
@Natan Euler My simple statement which neglected many crucial factors was right to the point isn't it? Semis are highly cyclical and we are at top of cycle now, your statement of 'limited downside' just isn't true, is it?

Hold for 10 yrs? I won't touch semis, any semis. They are highly cyclical. Only for those with strong stomachs.
Mike Bruzzone profile picture
Intel owes me and my constituents money Intel better perform with or without Gelsigner. mb
@Mike Bruzzone Wow, Intel owes you money . . . and it better perform with or without Gellsinger . . . . senti come la cinema Godfather. . . . .
mk1992 profile picture
"The only hope ....... and the flowery promise that everything will be better in 2025."

If you only know anything about semi tech/processing, you will not say that.

Intel's failure last few years, if boiled down to one simple sentence - they did not adapt EUV for 10nm.

They come back, if there is going to be a comeback, if boiled won to one simple sentence - adopt EUV. Which they are going to do. And you KNOW ASML will be behind them supporting them All-dar-Way.

Now, gulp, still going to chant 'flowery promise'?

signed: retired 25 yrs silicon valley product engineer worked with bleeding edge products.

This semi cycle over, INTC goes down with the rest, I'll be nibbling a little.
Compact profile picture
@mk1992 similar comments were said about Microsoft after the 2000 crash......old....nothing worth....declining business model............ I ihink Intel has enough cash to turn things around with a 100%committed CEO & management team. In the waiting phase I'm getting paid a 100% higher dividend than the S&P........works for me.
@mk1992 what I'm hearing from my colleagues is not so simple though. Behind the tech mishaps(including euv issues), there's more structural problems in the organization, I've heard.
mk1992 profile picture
@fastdunn I don't doubt. To arrive at such a bonehead decision in the first place and stuck with it for so long says there's problem. They'll fix it, I'm sure. Or at min., they have a chance now.

But now is not the time to buy. In the next few years, there will be a semi downturn. That will be the time to take a small position. Should be good risk reward ratio. Loose? Loose half. Win? 2x to 3x. If chance for either is 50%50%, long term betting like this should produce nice returns.
if Intel can not grow meaningfully, then they should buy compatible companies to grow. That is what most of the big tech company does it anyway instead of wasting capital on stock buybacks
INTC sounds good but their past performance beyond sucks they have been living off the past for so long. I want INTC to succeed the world needs it but can they in such a short time. Just in case have NVDA & TSM already
Intel flowers are artificial. Intel problem is lack of Intelligence in its executive team.
Replacing a puppet CEO with a clown one won’t help neither.
And as far as it’s price action, it is quite consistent; keeps in 30-60 range. A good toy for scoop traders.

Investors have long made their choice and picked AMD and Nvidia.
All it takes is a 10 cap analysis to see what a bargain this company is . And with all the changes, it’s double good.
"However, these deals are based on the hope that Intel can successfully deploy ASML high-NA in the middle of the decade. "

Amazon deal was described as a deal to use Intel's assembly/packaging. Nothing mentioned about it requiring high-NA.
One fact is for sure-----AMD with there rock star CEO Lisa Su, is ripping on all cylinders. I remember when Cramer was thinking of selling AMD in the $30.00's------did I mention that Lisa Su is the smartest student to ever graduate from Bronx Science!!
@kevinconnolly don’t forget to give some love to Mark Papermaster who is AMD CTO and oversees chip designs.
ckarabin profile picture
Good analysis! One must ask what has changed and then what signs do we have that say it more than some hollow promise? They may suceed. Why should we believe that?
03 Aug. 2021
Great hedge against China absorbing Taiwan.
In 3-4 yrs intel will generate 90-95b revenue adding a company of both nvidia plus amd size of 2021. Period. Mobileye will itself generate 4-5b per year. Iotg is awesome. Ccg will hit 45b consistently with discrete gpu in the product mix. There are problems to address but this bearish thesis is just for funds to acquire the stock and take out 200% more returns
Intel's pluggable optics are ramping into 200G, 400G and sampling 800G.

Optane memory is becoming a must-have feature in hpc.

Intel's eASIC chips are becoming a popular solution in 5G infrastructure processing, replacing FPGAs.

Xe GPUs will likely ramp quickly, considering the current scarcity of GPUs... crypto mining, AI processing, gaming booms.

Mobileye is developing a data services business also. You never know what will take off.

In three to four years I could envision the Harlem Globetrotters joining the National Basketball League, and going "all the way" to the play-offs: www.usatoday.com/...

Intel? I see it treading water, at best. Dead money until it can demonstrate that it has its chip-manufacturing issues resolved.
@Dinger in last 6 years intel went from 55 to 77b … talk about track record there it is…
It will take time for INTC to catch up but the (free) world needs a geo-safe foundry and INTC is the only one that fits the bill.
Thomas Mazzarino profile picture
@blorber Agreed, it is a matter of national security.
@blorber Samsung is a Geo safe foundry + TSMC and Samsung will have fab in the USA.

INTC can't supply the world, they barely can supply themselves, even with expanding the foundry business, the whole economy will go down if TSMC (Taiwan) is taken over by China somehow, something that should never happen anyway unless China wants to put the world and themselves in jeopardy.
TSMC is the supplier of too many business, and not only Apple or AMD with cutting edge node, but so many more customers on older nodes...
@Misfit-Nicky all Intel has to do is lower prices snd these other debt laden companies will feel the hurt.
Sighcopath profile picture
Any time i hear some company making promises I remember the Depeche Mode song "Policy of Truth".

brettze profile picture
I fiind it fascinating that you never mention chip shortages and what they might mean to us in the comiong months and years despite scattering assurances that they wlll be remedied during the meanwhile..
We may have "Chip Shock!" Like oil shock .. but we already had "Lumber Shock" that was beyond shock and maddness!! Have you looked at those OSB boards on the shelves for prices?? 500% or worse! I reemmeber just $11 per OSB plywood board now it is $60 or higher.. it may be falling by now.
It seems likely that chip prices will double triple quadruple depending on availability . Customers can delay but many just cannot because of obvious reasons unless they resort to buying used chips and stuff. which is possible.
Now with Intel as the biggest X86 manufacturer and to have its revenue doubled or tripled in a short order is something amiss in your analysis above.. It can happen or it wil not happen.. your decision!
Don"t fight the tape!!! I get it!
You don't mention the work behind the scene in Dan Loeb!! Intel will trade at 100$+ a share bet on it
@cashflow positive Question is when? Still years away from promise that may not materialize
@ahsan_shah the lower it goes I buy more. I can wait years so long as div payment increases higher than inflation
@cashflow positive this is probably the safest chip play out of the bunch in the medium term
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