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Intel: Double-Digit Growth Galore

May 04, 2022 5:20 AM ETIntel Corporation (INTC)AMD, TSM126 Comments
Arne Verheyde profile picture
Arne Verheyde


  • Intel had a solid (boring) quarter that has been misinterpreted in many ways.
  • Most people thought Intel revenue declined, but in reality, nearly all important segments grew double digits. No one buys Intel for its PC business.
  • The stock dropping on downside Q2 guidance, despite Intel reaffirming its FY guidance, tells everything about the myopic short-sightedness of Wall Street.
  • Intel is expecting a strong data center through 2022. If the data center collapse (due to AMD share gains) isn’t happening this year, it will never happen.
  • Buy the dip on overblown myopic concerns.

Intel company logo on the roof.

RobsonPL/iStock Editorial via Getty Images

Investment Thesis

Intel (NASDAQ:INTC) had a solid in-line quarter that didn't change anything about what anyone knew about the company - hardly surprising after February's Investor Meeting.

However, people always seem to go out of their

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 a beneficial long position in the shares of INTC either through stock ownership, options, or other derivatives. 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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Comments (126)

So, author is not disappointed at all that the highly-hyped (by author himself) Alder Lake launch actually resulted in CCG drop. What a surprise.
"In stark contrast, Intel 4 is just the first of four nodes in two years, culminating with 18A in H2'24. This means Intel will go from being a dinosaur to the cutting edge of semiconductors in just 8 earnings reports. This is the magic trick that Intel has up its sleeves."

The problem is and continues to be, that while AMD and NVIDIA are shipping products on the latest nodes Intel is "shipping" claims on PowerPoints. In the autumn AMD will be shipping 5nm Zen 4s and NVIDIA new GPUs on TSMCs latest 4nm (or 4N as NVIDIA likes to call it). Intel is at least a year away from shipping anything on their Intel 4. And if history has taught us anything, probably there will be delays. They had the same aggressive story on 10nm. As they say: Fool me once shame on you, fool me twice shame on me.
It’s amazing you can write this with a straight face lol. I get you are an Intel bull but you are lying as much as Pat G. Are you sure you aren’t Pat G’a secretary??

INtel ARC will be a Chinese only release as arc mobile was a smangun Korea only release. It’s dead on arrival. ARC is never going to compete with Nvda/AMD on the GPU front.
@2CommaClub being the first to AV1 hardware accelerated encode is a nice feature. The relatively large matrix compute, including bfloat16 and Int4 are interesting features. The Deep Link feature is a nice bonus.
TYB profile picture
Double digit, is Arne living in the 90s? The whole competitive business landscape has changed and Intel is a Dinosaur! Is this like Pat’s line on AMD in the rear view mirror? Is Negative the new positive and behind is the new in front ?


AMD: 71% (GAAP and Non-GAAP, 55% if excluding Xilinx)

Intel: -7% (-1% non GAAP, -7% GAAP)

UMC : 34.7%
TSMC: 36%
NXP: 22.2%

Samsung Memory: 39%
Qualcomm: 41%
SK Hynix: 43%

Micron: 25%

onsemi: 31%
MediaTek: 32.1%

STMicroelectronics: 17.6%

TI: 14%

ams OSRAM: -3%
SkyWater Technology: 0%
Power Integrations Inc: 5%
Qorvo: 8.72% (GAAP, Fiscal Q4 2022 compare to Fiscal Q4 2021)
Skyworks Solutions: 14% (Fiscal Q2 2022 ending March 31, 2022)
Melexis NV: 18%
Alpha and Omega Semiconductor: 20%
ASE Group: 21%
Realtek: 27.49%
Wolfspeed: 37% (Third quarter of fiscal 2022, ended March 27, 2022.)
Silicon Laboratories: 48%
Renesas Electronics: 70.2% (Non-GAAP)
SiTime Corporation: 97.7%
Well, Intel promised Sapphire Rapids in the same year as Icelake (2021). Didn t deliver. Intel promised DGPU in Q1/2022, didn t deliver.
Despite the fact, that Alderlake architecture with efficiency cores seemed like perfect fit for low powered laptops, it is struggling to match Ryzen 6xxx series where it (in laptops) matters the most (low power). www.youtube.com/...
We ll not speak about integrated graphics of 6xxx series vs. Alderlake, because this is no match at all.

But Intel is not only lacking on process technology, but clearly on 3d packaging technology as well.
While intel is just talking and making great presentations about foveros(where are the successors of lakefield?), emib, ODI.. TSMC/AMD is already delivering actual 3d stacked products for revenue (MilanX, Ryzen5800X3D). And cache is just the PoC demonstration of the technology... There are many more usecases coming in the next years...
RyzenFan profile picture
@and35rew That's the main difference between Intel and AMD.
Intel promises but AMD delivers.
@RyzenFan so, where are AMD's avx512, dlboost, ddr5, pcie5, wifi6e, thunderbolt, tiled matrix operations? Intel delivered.
avx512 on Alder lake is dead, more trouble than it was worth.
Probably too hot.
INTC delivered it too soon as in a rush to get a headline win.
DDR5 is still too expensive.
Not everyone wants a new motherboard with the new chip.
Very good detailed analysis. I am long term Intel, also encouraged with the direction management is taking now. As usual time will tell.
Regards AMD, noting that the market has not been particularly kind to AMD's prospective having dropped 35 % since December 31
including a drop of 6% today. All I can say about that is ouch ! Thanks for the analysis !
@lou will
INTC $68 peak to $44 YOY is also 35%, about $100 short of AMD peak price and about $50 below AMD today.
@RUBYRUBY3 Well the point is that the current period is more applicable from an investment standpoint as it pertains to future successes.
@lou will
Counting chickens with a bucket of eggs.
3,6 and 12 month EMA lines show climb flutter on double top and current fall. Buying against these lines can be very expensive or at least force you to wait a very long time to break even. Wait till it crosses up over them.
Good luck with your picks
INTC 3 year

A good covered call stock for me so far.
Are we going to be sitting here years from now and waiting for intel to deliver ?
@Geo67 probably yes
Arne inadvertently gets another headline bang on. First "Intel: EUV Misinformation" - which perfectly described his content.

And now "double digit growth galore" - yes, there is indeed double digiit growth for almost every semiconductor company. Except Intel.

Comical Arne strikes again.
RyzenFan profile picture
Intel's client computing group is down solid double digits 13%.
Compare to AMD's growth, Intel is pathetic.
Long Intel. AMD fanboys got no idea.
RyzenFan profile picture
@Agency Man I'm an AMD fanboy. All I need to know is at today's price,
I'm looking at 5000% gain on my AMD shares. How's your Intel shares?
"Intel is the "greatest turnaround story in history", which is along the same lines as how I have been describing Intel."

Amen! Been saying this for months!
@lannorris5 Wouldn't is be wiser to wait for the actual turnaround to happen before declaring victory ?
Frank Siedler profile picture
Two stocks which have beaten the earnings estimates ... but only one of them has a future ... that's AMD ... Intel revenue goes down ... AMD revenue goes up.
RyzenFan profile picture
@Frank Siedler AMD gross margin is up too.
DAHABES profile picture
For all the naysayers... I read an article a few years back about "The Only Twenty Companies That Matter" - TOTCTM. These are the top 20 companies (US) in terms of annual earnings. These 20 generally account for 80% of ALL earnings. In the end, it's earnings that matter. They include names you would expect - FB, GOOG, V.

And INTC. Consistently. More consistently than some of the others (like the mega banks/financials - MS, BAC - which tend to swoon every few years due financial excesses playing out during recessions. Any Aristocrats among these tickers? NOPE!).

INTC pays a solid, well covered dividend, delivers consistently on FCF generation, it has improving prospects and it isn't going away any time soon. It's not TBTF, but it's damn close. AMD is a midget in comparison...and pays no dividend. 'Nuff said. Get real, people.
@DAHABES GM shareholders thought the same thing about Toyota in the 1980s. And does it matter that INTC pays a dividend if the stock keeps going down?
omdguy profile picture

If Facebook and Google are on this list, then it isn't much of a list at all. Both companies don't "produce" anything of significance and rely on data mining and ad sales for revenue.

Both could disappear tomorrow and the world wouldn't miss them...
@state_of_affairs Big difference. GM sat around and watched other companies get better. INTC is making changes to get INTC better investing in R&D and new Fab business and righting the ship while still staying way ahead of the competition in Revenue/Earnings/Cash Flow.
Trust me folks, there’s no bigger expert on “myopic concerns” than Arne V.

Funny how he’s guilty of exactly what he accuses others of but refuses to acknowledge how terrible his analysis of INTC and AMD has been. Anyone unlucky enough to have followed his advice knows the truth.
@Art Rimbaud eh AMD crashed from 164 to 80 and change...looks like he ( and me ) called peak AMD perfectly
@zisdead yeah, a broken clock is also right twice a day. He was bearish all the way from $10 to $120 and, more importantly, completely missed the sea change in the industry dynamics, blinded by his cognitive and anchoring bias.

If that’s the type of analysts you want to follow, calling 1-800-PSYCHIC for stock picks is likely to be more accurate and not as financially disastrous.
We truly live in a golden age of cognitive dissonance (the curious effect whereby people re-interpret information directly contradicting their firmly held beliefs as supporting them as the pain of accepting the need to change is simply too high).

One does wonder exactly what set of comparative Intel/AMD results would cause Arne to reconsider ... 0% growth vs 71% growth doesn't seem to be quite enough ...
C185 profile picture
Most people aren't going to be fooled by the "71% growth" number. Just adding in Xilinx revenues (which came with share dilution) isn't organic growth. Back out Xilinx revenues in their Q2 forecast and AMD is forecasting little Q1 to Q2 growth in their core businesses. The reality is AMD's core businesses are decelerating and adding in Xilinx doesn't change that.

AMD is down from $160 and with these so-called "blowout" earnings it's barely holding above $90. Perhaps you should take your own advice and re-evaluate your firmly held beliefs.
@PeterB_86 Clear from the article title who had written the piece.
@C185 How do you know what my beliefs are and how firmly held they are ? I have no stake in either AMD or Intel.
manpower profile picture
$INTC is too focused on building FAB(s). Not enough on advancing its technology and markets. Should not have brought back current CEO. I didn’t care for his thinking when he worked for $INTC previously.
yet they introduced ddr5, pcie5 in Alder Lake last October... looks like a year ahead of AMD.
IPU chips, NFV chips, Bitcoin mining chips, SPR-HBM... all happening now for Intel, while AMD not on the map.
manpower profile picture
@jayn These are not helping $INTC in competing with $AMD.
@manpower building fabs is good if you are capacity constraint, which intc is last I checked.
Extensive and comprehensive analysis of the company that the market simply loves to hate. If you look at the charts Intel stock always goes down after a quarterly earnings report regardless of results.Mister market constantly looks for the negative. Intel is still a 70 + billion diversified revenue producer that generates around 20 billion in profit, and 20 billion in FCF and pays a dividend. New management that understands the business in in place for 15 months and you can see the divergence neither R&D approaching 20 billion which will ultimately turn out better products.
I own a large portion since 2011 with SP of $24 and anticipate that if Intel goes from poor performance to even average that the company will breach 100 billion and the stock will respond in kind
oak8292 profile picture

The market is not hating Intel. The market has a strong bias for growth and Intel's growth story has been very weak. The stock runs up prior to earnings with expectations and gives it back when the story hasn't changed. Slow growth gives an average PE.

Slow growth with underinvestment in a capital intensive business generates a negative sentiment. Intel's margins held in the 60% region by underinvesting in capital during the extended 14nm run. FCF should differentiate between capex to sustain operations versus capex for growth. In the semi industry this is extremely difficult to calculate since businesses need to run just to stand in one place. If you aren't building new fabs, like Intel then you are falling behind. Intel's FCF is going to be much less than $20 billion for a number of years because they have underinvested in node transitions.

The PC volume is what drives Intel and it is not a growth story. It has been shrinking since about 2012 when the ARM tablet took over the low end of the PC business. Growth in servers is great but is it large enough to offset the shrinking PC business and does it have adequate volume to support the R&D and capex of Moore's Law. The smartphone business was the growth industry for the last decade and Intel missed it. All of the new wafer volumes that support fabs came from smartphones.

The market for the last 10 years has rewarded growth narratives and Intel has not had a compelling growth narrative for the last decade.
r Negoro profile picture
@oak8292 you got it right.
@oak8292 , dead-on analysis, Oak !
SemiWiki.com profile picture
Intel: -1% (-1% non GAAP, -7% GAAP)

AMD: 71% (GAAP and Non-GAAP, 55% if excluding Xilinx)
TI: 14%
NXP: 22.2%
Micron: 25% (Fiscal Quarter ended March 3, 2022)
Onsemi: 31%
MediaTek: 32.1%
UMC : 34.7%
TSMC: 36%
Samsung Memory: 39%
Qualcomm: 41%
SK Hynix: 43%
TYB profile picture
@SemiWiki.com amazing in the biggest boom in history the biggest with its own fabs has contracted. Odd as they claim their 10nm and 7 are doing well, very strange as every other company grew revenue, income and GM, indeed very odd
@TYB At the same time, they are telling everyone they have constraint till 2024 AND they need to cut ASP to compete.

7(intel 4)? it is not on MP yet. Just on the ppt. TSMC is going to pilot run their 3nm in 2H 2022.
"When it comes to measuring Intel, investors use a microscope that provides an even stronger magnification than what Intel uses to inspect its transistors"
ahahahaha, true!
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