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Intel: Dead Money Walking, Avoid

May 26, 2023 9:39 AM ETIntel Corporation (INTC)AMD, NVDA, SOXX, SPX, SPY, TSM61 Comments


  • Nvidia is seeing the potential for significant market share gains against Intel by replacing more data center CPUs with GPUs.
  • Intel already has its hands full dealing with AMD's success in data center CPUs. So it doesn't need another battle to deal with.
  • Nvidia's AI leadership looks ready for prime time to dismantle and accelerate Intel's data center leadership.
  • Intel could fall further behind, even as it faces a highly challenging endeavor to take on TSMC.
  • Intel CEO Pat Gelsinger likely has his work cut out here, as the company faces a monumental task to regain its leadership against its peers.
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In my previous Intel Corporation (NASDAQ:INTC) article, I highlighted that investors shouldn't chase the recovery in INTC, as its valuation was no longer attractive. In addition, INTC's unconstructive price action also indicated caution.

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This article was written by

JR Research profile picture

JR Research is a seasoned investor with a background in economics. He focuses on identifying growth companies, market trends and growth opportunities. His approach combines price action with fundamentals.

He runs the investing group Ultimate Growth Investing, which specializes in identifying high-potential opportunities across various sectors. The group is designed for aggressive investors seeking to capitalize on high-growth opportunities, and investors looking for growth opportunities at a reasonable price. Learn more.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of AMD, NVDA, 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.

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Comments (61)

Intel's presentations at VLSI on PowerVIA suggest they will be in production on Intel 20-A with both Power VIA and GAA in 1H 2024. Looks like Arrow Lake will be the first product with it.
"Intel's presentations"
Never learn.
A lot of self interested comments on here. The fact of the matter is that TSMC cannot continue making 60% of the worlds semiconductors and the world will need more manufactured. Fabrication is a very good idea. NVIDIA AMD are design only companies. They don’t make anything. Designs are patent assets. TSMC, Samsung and Intel will become more profitable. Intel has the highest upside of the three
TSMC has a larger expansion plan than INTC so does Samsung and if IFS does not work out INTC will not expand at all.
You don't have to make the chip to make money in chips.
Southwest airlines does not make airplanes.

"Intel will become more profitable."
They have been less profitable for 2 years now and have a ton of money to spend yet.
@RUBYRUBY3 shhhh you know Mr @Obvious0101 knows it all , so no need to spell it out:
@Obvious0101 Not sure if intel has the highest upside but it is true that intel has something that others dont. Given more and more tensions between US and China bets in INTC still make sense. Dont forget that Warren Buffett just dumped his positions in TSMC months ago.
Intel showing a Meteor Lake laptop running some ai applications on its VPU. Contrary to much speculation, thw's article reports that desktop designs are still coming.



"...different versions of the design will also come to desktop PCs."
When the marketcap of NVDA can pop over 200B or roughly the value of 2 INTC u have to ask yourself if the hype is really sound. MR. MARKET says bc NVDA has a great outlook that its value deserves 2 more INTC companies. This is exactly the type of zoom boom we saw during covid.
Nvidia struck a deal with tsmc just as a strategy to slow AMD down ,by averting some of the manufacturing capabilities away from it's main rival . What we don't know ,is what Amd is developing quietly in the AI field. IMHO rugs will be pulled under later this year ...
@Karlmarcs there is no way you could ever know this.
Dead Stock Walking!
@JR Research While indicating INTC is even "more" dead, curiously you continue to advocate a HOLD rating; care to explain?
JR Research profile picture
@faces2021 At these valuations, the downside is likely limited but upside limited too.
AnonymousAlpha profile picture
Finance, sales, marketing people took over Intel with their finance, accounting, MBA type degrees and ruined it since decades ago. The board members of that time with their mismatching skills that are not in engineering or sciences that Intel uses put in place above mentioned people as leaders.
@AnonymousAlpha there might be a simple fix if that is the issue - changing board members
Gary Schuster profile picture
@flyingbanana For a number of years Intel senior management was incompetent. It's the board's job to ensure senior management is working in the best interests of shareholders. The Intel board failed to do their job. The board members that went along with Intel's senior management, prior to Gelsinger, should have been replaced years ago.
@Gary Schuster yeah apparently investor's patience has been gradually eroded by unfortunate business/stock performance of intel in recent years.
jtharayil121 profile picture
Article fails to dig deep into intel’s businesses and most importantly what is the future cash flow and P/E ratio. It is only looking at the data center business. It is not dead money. It is good money for patient investor. The Fab business will grow over time and pc business has decent growth.
INTC is not participating in the SMH ETF run up.


These are:
Intel has been a lousy stock, basically, since the 2000 crash.
JR Research profile picture
@Doggywag Unfortunately, I can't refute
@Doggywag I first invested in INTC right after the 2008 crash. That was a good time and easy $$$ everywhere.
Argonne will have a lot to say about the future of the large scientific models, which they'll be training on Intel GPUs.

If you have some question about Intel's commitment to AI and HPC, you just need to look at their huge oneAPI software bundle ...the open source on github and all of Intel's converted compilers and debugging support that they now give away...

"they now give away..."
They gave away the whole Aurora computer

$500 million contract $300 million write down.
$200 million to cover all the costs from 2015 to today.
INTEL lost it's shirt on Aurora.
Qgambit profile picture
@jayn Aurora is going to be an Scarlett letter for intel. A huge demonstration of the inferiority of intel technology. If it uses 60mw as expected to get to 2exaflop, it will be 50 percent less energy efficient that frontier, which is now almost 2 years old and uses last gen Amd tech. When AMDs MI300 2 exaflop supercomputer comes online later this year, it will achieve the same performance in half the racks and half the power consumption.
LexiAlex profile picture
@Qgambit we’ll said, Intel it’s going down even more after Aurora numbers are out
Marvell considers CXL over optical switching to be the future of AI large model processing.


Intel has been at the front of CXL development, as well as in silicon photonics, so seems like they are well positioned to make the transition.
Autosoft profile picture
@jayn CXL was one of the first "cooperative" projects Intel has done in decades... It's now being forwarded by lots of companies and AMD has expanders of EPYC systems now at 1.1 with support for 3.0... I haven't heard much from Intel on it yet though... I'm not sure why Intel is falling so far behind...
!dead ... +5.84%
up 24% since this article ... not dead.
@jayn down 30% over 5 years.... rekt
INTC Test coming up soon
It's crystal clear to me that INTC died as a growth and innovation tech company not years ago, but decades ago. Its biggest problem is the culture. Even if it gets support from our tax money, so what? This is not how a growth and innovation tech company survive and thrive.
@xpan hard to tell actually, companies like ford or ibm are still there, trying to innovate.
Gary Schuster profile picture
AMD's "lead" in CPU technology apparently wasn't enough to convince Nvidia to use AMD's CPUs in their DGX H100 servers (Nvidia, Intel team up on energy efficient AI server | TechTarget)? Furthermore Intel has belated realized the importance of GPU's and is working hard to become a serious player in that market (www.anandtech.com/...). Intel fell behind TSMC in chip fabrication technology. AMD and Nvidia benefitted from that because they use TSMC to manufacture their chips. Intel's roadmap has them catching up with TSMC's chip fabrication technology in the next two years. Assuming this occurs the performance leads that AMD and Nvidia chips currently enjoy are likely to significantly diminish. Many investors are too pessimistic about Intel's prospects for competing in the growth of the AI market.
@Gary Schuster
" wasn't enough to convince Nvidia to use AMD's CPUs in their DGX H100 servers "
Or MI300 was coming after NVDA and they chose not to feed AMD CPU side as a competitor.

Now let's see if INTC can actually provide " profitable " 2 million Sapphire Rapids for NVDA in months.
@Gary Schuster Nvidia is building their "Grace" CPU, and will probably stop buying from other vendors.
@namlu Intel gave away parts to claim a design win, Nvidia will have Grace in 6 months and discard Sapphire Rapids immediately.
Intel has hit multiple inflection points this past two decades and failed to navigate them. Andy Grove is rolling in his grave.
Anyone with an once of brain has seen this coming for a long time yet there are people who keep pumping INTC as if it’s 1999. The train left the station long time ago. The only way Intel can become relevant again is by finding a gullible investor to buy the outdated rotting Fabs. Maybe Intel can reinvent itself like AMD did after splitting their fabs long time ago. All the idiots that keep saying INTC can come back like AMD did are forgetting the main reason AMD made a giant comeback is because they got rid of their outdated badly executing fabs. There’s a reason Global Foundries is a 2nd tier foundry. Today, Intel fabs would be somewhere between 2nd and third tier due to their extreme lack of foundry experience and outdated technology offerings. Their intel customer would be intel product divisions who would quickly want nothing to do with them and will pivot to TSMC in no time. Until Intel sell ( or pay someone money ) to take their rotting fabs , Intel stock will keep falling and will find a bottom below $10 maybe $2 like AMD did, that would be the time to touch Intel. Until then , the current CEO & board are driving the company towards bankruptcy while their competitors keep on growing by innovating better ways to do things like what Nvidia is doing. The customers love it as they are tired of intel monopoly asleep at the wheel. Intel will be chopped into pieces in the next 5 years. However, they haven’t started that process of selling or paying someone to take the fabs. Maybe gullible oil money can buy them and it needs to happen soon before bankruptcy kicks in. Intel revenue projections for 2023 are going to be what $11 -12 billion per quarter ? Nvidia alone is going to match or pass Intel quarterly revenues. Some people still can’t see the market share loss as they keep saying oh AMD is not taking more market share and they are completely missing the big picture with Nvidia changing the rules of the game in data center. This is how myopic intel bulls are , I suspect most of them are intel employees or intel boomers.
@investor5115 to buy the outdated rotting Fabs? Can you tell me the difference in transistors density between Intel 4 (Meteor Lake) and TSMC N5 (AMD Epyc Genoa)? I will help you, it's about ~7%...
@mahekio I’ll let you figure out “ transistors density “ since you seem to be so accurate with that 7% you must be an intel engineer missing the big picture. Intel fabs know one thing only: making x86 chips for Intel designs only. Everything else they are a massive failure. But yeah go ahead and focus on transistor “ density “ with your 6x patterning steps 🤣. Intel fabs use can openers to run their wafers … that much is true.
dbchambers profile picture
@investor5115 Direct, blunt perspective - INTEL needs a 'STEP' change and/or a new owner to relight the fire. New investment in Ohio has provided a mini spark but a change is overdue. Excitement is growing in Ohio for the future plants, jobs, etc ......

But .......the questions and your list of concerns exist ......
"Given Intel's market leadership, I believe a "two-pronged" attack by AMD and Nvidia simultaneously could be detrimental, even as Intel attempts its transformation to regain process leadership from Taiwan Semiconductor or TSMC (TSM)."

Intel does not have market leadership anymore in semiconductor manufacturing. They never had leadership with GPUs. They only thing they have left is dominance in x86 processors, which is steadily fading away.
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