We came across a bullish thesis on Intel Corporation (INTC) on wallstreetbets Subreddit Page by Jellym9s. In this article, we will summarize the bulls’ thesis on INTC. Intel Corporation (INTC)’s share was trading at $20.92 as of Dec 6th. INTC’s trailing and forward P/E were 88.08 and 23.53 respectively according to Yahoo Finance.
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Intel’s strategic position heading into 2025 presents a complex narrative shaped by technological competition, geopolitical influences, and evolving market dynamics. The company faces immense challenges in its traditional product segments, particularly in the design of GPUs and CPUs, where it is significantly lagging behind industry leaders like Nvidia and AMD. While Intel still holds a lead in CPU production, the datacenter market’s increasing reliance on GPUs for AI workloads has shifted demand, leaving Intel’s core product offerings less lucrative. The company’s recent efforts in GPUs, such as the cost-performance-focused Battlemage B580 targeting budget markets, highlight an uphill battle to capture meaningful market share.
Amid these struggles, Intel’s Foundry Services segment emerges as a pivotal opportunity, especially under a new administration likely to prioritize American manufacturing. The geopolitical landscape, marked by supply chain vulnerabilities and Taiwan’s “Silicon Shield” policy, underscores the urgency for a robust domestic chip manufacturing ecosystem. The CHIPS Act, though imperfectly implemented, provides a framework for Intel to establish itself as a critical player in U.S.-based semiconductor fabrication. With Taiwan’s TSMC unable to fabricate its latest nodes in the U.S. and facing capacity constraints, Intel has a window to secure external customers, particularly for cutting-edge 18A and 14A nodes, which could rival TSMC’s 2nm technology.
The prospect of a realignment within Intel also holds promise. It is speculated that Intel could divest its Products division, potentially to AMD, to eliminate conflicts of interest and fully commit to its Foundry ambitions. Such a move would align with government incentives favoring domestic manufacturing, leveraging tariffs or other measures to boost demand for U.S.-made chips. This shift would allow Intel to position itself as America’s TSMC, a crucial component of the nation’s technological independence.
Intel’s success hinges on navigating these geopolitical and technological inflection points. With support from an administration emphasizing domestic manufacturing and strategic realignments, Intel has the potential to transition from a lagging product innovator to a dominant foundry player, offering a compelling long-term investment narrative despite current challenges.
Intel Corporation (INTC) is not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 68 hedge fund portfolios held INTC at the end of the third quarter which was 75 in the previous quarter. While we acknowledge the risk and potential of INTC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than INTC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.