INTC took a hit on earnings but we think it's way overdone.
Our investing plan all along that their investment cycle would end this year at worst but it may be worse because they’ve shifted to more AI and that’s costing them many Billions more than originally planned. BUT, on the other hand, there's stimulus money coming in.
Still, back to $30.80 again is just as silly as it was last time if you are a long-term player.
At this price – you can buy INTC for $127Bn, which seems like a joke!
In 2018-2021 revenues were about $75Bn and earnings were about $20Bn. Last year was an investing year and they only made $1.7Bn (75x) and 2024 should be $6Bn (21x) and next year maybe $10Bn (13x) and that’s just on the road back to $20Bn+ in the future so, do you want to buy the company now, for $150Bn, knowing you’ll be getting 7.6% back in 2025 and hopefully more like 15% down the road?
Here's the analysis by Warren:
🤖 Intel’s recent financial and strategic maneuvers reflect a challenging period characterized by significant competition and execution hurdles, particularly in areas crucial for its future growth like AI and foundry services. Based on the detailed materials provided, here’s an analysis of Intel’s earnings, strategic outlook, and a fair value estimate for January 2026:
### Financial Performance and Guidance
Intel’s financial results show a mixed scenario with some segments, like Client Computing, showing growth due mainly to cyclical factors, while other key areas like Data Center and AI underperform due to strong competition from rivals like AMD and Nvidia. The significant downturn in guidance, with expected revenue falling short of consensus estimates, reflects ongoing struggles in key business areas.
### Strategic Analysis
Intel’s strategy appears to focus on regaining technological parity with competitors through aggressive node development and expansion into foundry services.