Intel (INTC)

(A Top Pick May 26/22, Down 17%)

It's out of favour. He targets $25.92 or 24% lower than today's price. Yields 2.11%. If you like semis, this is the cheapest one. Great quality, but they need to catch the next chip trend.

Past success has not been able to be maintained.
Better choices within chip sector.
Would not recommend investing.

Buy both AMD and INTC along with your NVDA shares. NVDA's pretty well sold out into Q3 of 2024, so there's lots of demand. NVDA's going to have competition from these two. Impressed by INTC's CEO and promises on the foundry side, which should translate into accelerator chips and advanced packaging. 

5-10 years ago, it was the king of the hill, but then it just wasn't delivering. Now the CEO is executing and delivering. Lots of good things happening. Both design and manufacture, which is unusual. New chip will be very competitive with that of NVDA. Tremendous buy around $34-36. 12-month price target of $49.50. Yield is 1.41%.

Intel has structural issues and is frozen in time in a business (semis) that is dynamic. Nvidia, AMD and Broadcom are on buyers' lists, not this.

They just reported a return to profitability. He held this for 10 years, a great stock until management and other factors changed. Yes, Intel beat, but it ain't cheap. You have a long wait in this at best, though you won't lose money in it. He prefers Micron, NXP and others.

He wants to like it, but it's hard. Has to right the ship in terms of technology and execution. The foundry business will be successful over the long term, but competition is TSM, which is a very good company. Complicated story. Undervalued. He's watching. Other good names to buy now.

Models 47% growth rate for 2023-4 and trades around 19x 2024. It hasn't been one to buy for a long time, but the US foundry and reshoring theme makes a lot of sense.

If you want to invest in AI, invest in the best in breed--Nvidia and AMD--but not Intel which hasn't kept up.

Currently owns shares in company.
Solid growth profile.
Would recommend buying.

You want to be in the S&P 100. He models $15.93, 40% lower than now. Trades at book value and pays 2.6%. The semis are highly cyclical.

Semi-conductors have led for a long time but ran into difficulties last year. The sector has rallied along with the techs this year. Intel is still stuck in the PC market and has not made an effective leap into faster growing areas.

He sold last fall. Expenditures and capex still high. Dividend took a hit today. Restructuring necessary to stay competitive with TSM. Will take a while to come back.

The semi space is volatile, so you do have to manage your exposure. You could spend a good long time of an economic cycle out of favour, and you could suffer if you don't get the timing right. EPS has dropped from $5 to $2. Lots of leadership trouble. Failed to hit promises. Not competing well. Value trap despite the dividend.