Latest news with #Lip-BuTan
Yahoo
an hour ago
- Business
- Yahoo
Intel (INTC) Is 'Dead Money'--Layoffs, Slow Growth Raise Red Flags
In April 2025, Intel (NASDAQ:INTC) said it intends to slash over 20% of its global workforce under new CEO Lip-Bu Tan after posting quarterly results that beat Street estimates, though its shares remain pressured. That momentum, however, hasn't translated into investor confidence, raising questions about Intel's long-term strategy. Susquehanna analyst Christopher Rolland labels Intel dead money in its present form and suggests a split between its manufacturing arm and production divisions could unlock shareholder value. The Trump administration's focus on onshoring semiconductor production adds urgency to that strategy. Warning! GuruFocus has detected 6 Warning Signs with INTC. Intel's 18A process node is gaining traction despite early hurdles. Rumors swirl of potential foundry agreements with Microsoft (NASDAQ:MSFT), and talks with Google (NASDAQ:GOOGL) are reportedly underway. High-volume production is targeted for the second half of 2025, which could attract hyperscale customers and ease concerns over the lack of a major client. Shares of Intel have slid roughly 30% from their year-to-date high, though the stock pays a 2.57% dividend yield. Rolland maintains a neutral rating, noting rivals like AMD (NASDAQ:AMD) continue to chip away at Intel's market share and questioning whether a pickup in PC demand is sustainable. The mean price target of about $24 implies more than 20% upside if these initiatives gain momentum. Is Intel Stock Still a Buy? Based on the one year price targets offered by 32 analysts, the average target price for Intel Corp is $21.31 with a high estimate of $28.30 and a low estimate of $14.00. The average target implies a upside of +9.02% from the current price of $ on GuruFocus estimates, the estimated GF Value for Intel Corp in one year is $23.65, suggesting a upside of +20.97% from the current price of $19.55. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 days ago
- Business
- Yahoo
Intel Stock Is a Speculative buy Because of This 1 Factor
Even with all of Intel's troubles, investors still have good reason to believe the stock is oversold. Although recovery prospects are uncertain, Intel continues to hold certain competitive advantages. 10 stocks we like better than Intel › The decline of Intel (NASDAQ: INTC) and the numerous failed efforts to recover its leadership in the chip market have undoubtedly frustrated many investors. The company has hired and dismissed several CEOs who have tried and failed to return Intel to competitiveness. So profound are its missteps that the stock trades at levels it first reached in 1997. The current CEO, Lip-Bu Tan, is the latest leader to try to get Intel back on track. Although Cadence Design Systems prospered under his leadership, succeeding at Intel is far from guaranteed. Nonetheless, risk-averse investors have at least one compelling reason to buy a speculative position in Intel, which investors should consider when deciding whether to buy the stock. In short, investors should buy Intel because of its valuation. In this case, the "valuation" does not come from the metrics one might initially assume, like the price-to-earnings (P/E) ratio. Falling profits and the recent turn back to losses led to a spike in the earnings multiple, taking it to 104. Due to an expected return to profitability, its forward P/E ratio is 66, but that does not make the stock inexpensive. The same goes for Intel's price-to-sales (P/S) ratio of 1.6. With analysts expecting revenue to fall by 5% during 2025, it will probably take more than a low sales multiple to convince investors to buy. Instead, investors need to look at the book value and, by extension, the price-to-book (P/B) ratio. In the first quarter of 2025, Intel reported a stockholders' equity of $106 billion, which is what Intel would net if it decided to liquidate its assets and cover its liabilities. However, when multiplying Intel's outstanding shares by the stock price, it adds up to a market cap of $88 billion. That translates into a P/B ratio of 0.88. Such a price means that if the company liquidated, shareholders could presumably create $18 billion by that action. Indeed, Intel has no plans to liquidate, meaning it will have to eventually unlock some of its intrinsic value to drive investor returns. This is difficult because the loss of its technical lead makes it more of a commodity chip business. Such stocks tend to have difficulty attracting a premium and outperforming the S&P 500, leaving cutting-edge stocks like Nvidia to attract premium pricing. Nonetheless, Intel still holds competitive advantages often overlooked by today's investors. For one, no company owns more foundries on U.S. soil than Intel. The government has pushed for domestic manufacturing, and Intel is investing in the most advanced equipment sold by ASML, which is necessary to make the world's most advanced chips. Additionally, it remains a force in the industry despite losing its title as the world's largest semiconductor company many years ago. In the first quarter of 2025, Intel generated $12.7 billion in revenue. Although that fell slightly from year-ago levels, that is well above the $7.4 billion in revenue generated by Advanced Micro Devices, making it a major industry player. Thus, if it finds a way to close its technical gap and draws more customers to its foundries, Intel could stage a comeback. Despite its numerous challenges, Intel stock is still a speculative buy for risk-averse investors. Admittedly, Lip-Bu Tan's attempt to transform Intel will take years to achieve, and that success is not guaranteed. However, even if Intel stock does not deserve a premium, the fact that it sells for well under its book value indicates the stock is oversold. Moreover, Intel remains influential in the semiconductor industry, and its foundry footprint could become valuable in the shifting political environment. Ultimately, Intel is unlikely to return to industry leadership. Still, as well-positioned as it is in the semiconductor industry, the ability to buy shares below book value significantly increases the odds that investors can profit from this stock. Before you buy stock in Intel, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Intel wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,389!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $830,492!* Now, it's worth noting Stock Advisor's total average return is 982% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Will Healy has positions in Advanced Micro Devices and Intel. The Motley Fool has positions in and recommends ASML, Advanced Micro Devices, Cadence Design Systems, Intel, and Nvidia. The Motley Fool recommends the following options: short May 2025 $30 calls on Intel. The Motley Fool has a disclosure policy. Intel Stock Is a Speculative buy Because of This 1 Factor was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 days ago
- Business
- Yahoo
2 Brilliant Stocks to Buy With $100 and Hold for 5 Years
Intel's focus on aggressive cost-cutting and edge AI help position it as a turnaround story. Toast is improving its revenue mix and increasing client adoption of its AI-powered tools. 10 stocks we like better than Intel › The U.S. equity markets have been quite turbulent in 2025, affected by escalating geopolitical pressures, protectionist tariffs, and high interest rates. Not surprisingly, investors are shying away from high-growth, high-risk stocks and moving toward defensive plays. Yet, this period of volatility also offers long-term investors an opportunity to buy exceptional stocks at reasonable prices. All that is needed is a modest sum of $100, not required to pay for immediate needs. Buying even one of these two fundamentally strong businesses below can position you on a multi-year growth trajectory. Here's why. Intel's (NASDAQ: INTC) recent earnings performance for the first quarter was mixed. While revenue and earnings surpassed consensus estimates, investors were disappointed by the company's weak guidance for the second quarter of fiscal 2025. Despite this, many factors are working in Intel's favor, especially with the company hiring Lip-Bu Tan, who's credited with the turnaround of Cadence Design Systems, as its new CEO. The company has plans to aggressively reduce operating expenses to $17 billion in fiscal 2025, $500 million lower than the previous estimate, and to $16 billion in fiscal 2026. Intel also focuses on better asset utilization to reduce capital expenditures (capex) from the last estimate of $20 billion to $18 billion. Beyond cost savings, Intel is also gearing up to become a significant beneficiary of the ongoing AI revolution. While Nvidia and Advanced Micro Devices are ahead in the AI race, Intel is now developing full-stack AI solutions to enable the next wave of AI-powered computing. The company aims to improve accuracy, power efficiency, and security in running next-generation enterprise workloads such as reasoning models, physical AI, and agentic AI. Intel is also focusing on the edge AI market, which is estimated to grow from $53.5 billion in 2025 to $82 billion in 2030. Gartner expects half of the enterprise-managed data to be processed outside data centers or the cloud, in manufacturing plants, retail outlets, and healthcare facilities. These applications require low power and efficient architectures in areas where the company has excelled. Intel's 18A manufacturing process technology has also become a significant competitive advantage, thanks to its higher performance and improved power efficiency. With this technology, the company has built an AI PC client processor called Panther Lake and a server processor called Clearwater Forest. By demonstrating successful "booting of operating systems without additional configurations or modifications," these processors have highlighted the strength of 18A process technology. Subsequently, Intel Foundry has now emerged as an underappreciated asset in the company's portfolio. It's added two companies in the defense industry, while industry reports claim that Amazon and Microsoft are also exploring partnerships for 18A capabilities. Furthermore, Intel Foundry also engages with customers for Intel 14A process technology (a successor to 18A). Intel shares are trading 1.7 times sales, lower than their five-year average of 2.3. Hence, considering the company's many tailwinds and bargain valuation, the stock appears a smart buy now. In the past few years, Toast (NYSE: TOST) has transformed itself from a basic mobile payment application company into a complete operating system for the restaurant industry, including kitchen operations, restaurant and menu services, inventory tracking, payment processing, multilocation management, customer engagement, and data analytics. Toast currently serves 140,000 restaurant locations in the U.S., only 10% of the 1.4 million locations across its customer segments. While the company's current stronghold is in the U.S. small-to-medium-sized business market, management also focuses on enterprise customers, food and beverage retail, and international market clients. This indicates massive room for growth in the existing markets. Toast has leveraged advanced AI-powered technologies to boost average order volume and ensure effective advertising. The company has launched an AI engine, ToastIQ, which combines AI, restaurant expertise, and proprietary data. ToastIQ's features help clients with business insights, troubleshooting, marketing, employee scheduling, and pricing. The company's recent financial and operational performance for the first quarter has been impressive. Revenue was up 24.4% year over year to $1.34 billion, while operating income was $43 million, a dramatic improvement from the $56 million loss in the same period last year. Subscription revenue increased by 38% to $209 million. This shift toward more visible, sticky, and higher-margin subscription revenues is a positive. The company also reported free cash flows of $69 million -- an impressive feat, since the first quarter is typically the seasonally weakest. Toast added over 6,000 net new locations to reach approximately 140,000 total locations in the first quarter. This also included major enterprise wins, which are strong positives, as they usually demonstrate significant annual recurring revenues and lower churn rates. Toast trades at about 5 times sales, higher than its three-year average of 3.8. Although the valuation may appear expensive, it seems justified for a company with a huge addressable market, strong financial and operational metrics, and a broad customer base. Hence, the stock looks like a worthwhile buy now. Before you buy stock in Intel, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Intel wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,389!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $830,492!* Now, it's worth noting Stock Advisor's total average return is 982% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Manali Pradhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, Cadence Design Systems, Intel, Microsoft, Nvidia, and Toast. The Motley Fool recommends Gartner and recommends the following options: long January 2026 $395 calls on Microsoft, short August 2025 $24 calls on Intel, and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. 2 Brilliant Stocks to Buy With $100 and Hold for 5 Years was originally published by The Motley Fool
Yahoo
4 days ago
- Business
- Yahoo
Citi Maintains Neutral on Intel Corporation (NASDAQ:INTC) as ARM Gains Market Share in Q1 Microprocessor Shipments
Citi recently maintained a Neutral rating on Intel Corporation (NASDAQ:INTC) stock. Intel markets key technologies for smart devices. In an investor note, Citi highlighted that Mercury Research released estimates for Q1 microprocessor shipments and market share, with Q1 MPU units down 6.1% quarter-over-quarter, above seasonality of down 9.4%. Per the Mercury estimates, ARM gained market share over both AMD and Intel. Citi said ARM gained 281 basis points quarter-over-quarter and had 13.6% in MPU unit share. AMD lost 99 basis points and had 21.1% of the overall MPU unit share, while Intel lost 182 basis points and had 65.3% share. Latest reports, published by Reuters, indicate that Intel has considered divesting its network and edge businesses as the chipmaker looks to shave off parts of the company its new chief executive does not see as crucial. Talks about the potential sale of the group, once called NEX in Intel's financial results, are a part of CEO Lip-Bu Tan's strategy to focus its tens of thousands of employees on areas in which it has historically thrived: PC and data center chips. While we acknowledge the potential of INTC, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than INTC and that has 100x upside potential, check out our report about this cheapest AI stock. READ NEXT: 33 Most Important AI Companies You Should Pay Attention To and 30 Best AI Stocks to Buy According to Billionaires Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
4 days ago
- Business
- CNBC
Intel CEO Lip-Bu Tan has a long track record in the chip industry. Now he needs a big customer
When Lip-Bu Tan was named CEO of Intel a little over two months ago, he brought with him plenty of name recognition. Tan spent 12 years running Cadence Design Systems and before that was a prominent venture capitalist. He's also held board seats at SoftBank and Hewlett Packard Enterprise. "Lip-Bu's Rolodex is like nobody else's in the semiconductor industry," Intel CFO David Zinsner said at a financial conference this month. Zinsner said Tan recently met with 22 potential customers and partners in a single day. At age 65, Tan is going to need more than a vast database of contacts and four decades of operating and investing experience to turn around the company that put the silicon in Silicon Valley but is struggling to stay relevant in a market that's increasingly centered around artificial intelligence. Once the world's largest chipmaker, Intel has lost 70% of its value since early 2020. It's roughly flat since Tan was named as CEO on March 12. Tan's jam-packed schedule in large part reflects a need to change the industry's perception of Intel. No longer the dominant player in semiconductors, Intel is trying to pivot into chip manufacturing, especially as the U.S. focuses on investing in onshoring critical technologies. Tan has been listening to customers to find out specific technical requirements they would need from Intel as a foundry, he's said in public remarks. Under Tan's predecessor, Pat Gelsinger, Intel spent $90 billion between 2021 and 2024 on building the company's foundry operations and unlocking additional U.S. government funding. Capital expenditures in 2025 are expected to reach $18 billion. Investors, and eventually the board, lost trust in Gelsinger's ability to generate much of a return on that investment, leading to his ouster late last year. In an industry where roadmaps and capital plans are measured in five-year increments, Tan is under pressure to start building confidence immediately. "The foundry business, it operates at a different time scale," said Alvin Nguyen, an analyst at Forrester. "It operates with a level of investment that is tough to stomach, and very few publicly traded companies can deal with it." Intel faces a plethora of other challenges that all predate Tan's tenure. The company's central processors, or CPUs, that for decades were the most expensive and important part in computers, have been supplanted by AI chips, primarily graphics processing units, or GPUs, from Nvidia. Meanwhile, Advanced Micro Devices has picked up substantial market share in CPUs and server chips, and Qualcomm has emerged as a big challenger as well. Tan is working on an AI strategy under Sachin Katti, who was named chief technology officer in April after joining the company in 2021. Tan was born in Malaysia and raised in Singapore. He moved to the U.S. in the 1970s and studied nuclear engineering at the Massachusetts Institute of Technology. He's since touched just about every aspect of the chip industry. Before joining Intel, he was CEO of Cadence, which makes electronic design automation, or EDA, software, widely used by engineers at fabless chip companies to design new processors. As a venture capitalist at Walden International, Tan invested in Semiconductor Manufacturing International Corporation, China's national foundry, in 2001, and was on the board for over a decade. He's now betting on Intel, not just with his time but also his wallet. When he became CEO, he bought $25 million of shares, which he'll have to hold in order to earn his full compensation over the next five years. Tan has been keeping a fairly low profile since starting the gig in March. He's yet to sit for a press interview, and Intel declined to make Tan available for this story. But in his two public speeches as CEO at Intel events, he's laid out elements of his strategy. "We need to do a better job — make it easier for all of you to use our technology," Tan said at a foundry event earlier this month. "We will rapidly embrace industrial standards, EDA tools and best design practices." The fastest way to change the trajectory would be to announce a big foundry customer. Locking in substantial orders would serve as both a vote of approval to other potential customers and a signal to Wall Street that all those expenses will soon start turning into revenue. "One Nvidia, one Qualcomm, one Apple, one something of volume that really shows this meaningful commitment for the fab to build significant volume would really change the whole narrative," said Daniel Newman, CEO of industry research firm The Futurum Group. Tan's second public appearance as CEO came in April at Intel's Foundry Direct Connect event in San Jose, California, a few miles from the company's headquarters. There he hinted at one of his key objectives: rebuilding confidence. "This is a truly a service business, and that is built on the foundational principle of trust," Tan said. "You have to be patient to earn your trust." At the event, populated largely by people from the insular world of chip design and manufacturing, Tan directly addressed foundry customers, discussing the company's specific technologies in power and packaging that put it in position to take on Taiwan Semiconductor Manufacturing Company, the largest foundry in the world. Outside the convention center, banners still hung promoting the Nvidia GTC conference, which had taken place the prior month and packed the building's ballroom. Tan mostly acted like an emcee, calling up the CEOs of chip design partners such as Synopsys, Cadence and Siemens, who took the stage to discuss using Intel's technology. A key issue for Intel to address is the broadening of its foundry, which was originally designed for its own chip design teams, meaning some of the tools and infrastructure were company-specific. Intel has given the name 18A to its chip technology that it hopes to start producing in volume this year. "One thing about 18A was, it was developed initially as just something for Intel, and we intercepted it relatively early," Zinsner said earlier this month. That allowed the company to develop process design kits, or PDKs, "for the industry, but it still was not from the ground up developed as a foundry node," he said. Zinsner said the company's next chip generation, 14A, will be built for external customers. Analysts say that 18A may be Intel's first foundry process that could beat TSMC's rival process to market. Tan also recognizes that TSMC has created an industry standard, so using the same tools and technology would allow companies to more simply bring over work from other foundries. He said Intel is making its PDK easier to use. "My top priority is to make it easier for the ecosystem to do business with Intel," he said. One of the speakers at the event was Anirudh Devgan, who succeeded Tan as CEO of Cadence. Tan asked Devgan what AI chip companies need to see if they're to build on Intel. Devgan said the most important consideration is the need to focus on what the customer wants rather than what Intel prefers. "Intel Foundry, as you all know, is like the service business, so the customer comes first," Devgan said. "I know Lip-Bu has very good instincts to understand what the customer wants." It's a stark change in approach for a company that for decades was focused on selling its own chips and not on creating an ecosystem. In a podcast earlier this year, TSMC founder Morris Chang said that Intel, during its glory years, acted "like they were the only guy with microprocessors." If there was a disappointment at the Intel event, it was the lack of an announcement about a major new customer. Zinsner previously said, in response to a question about how many customers Intel had signed up for its foundry, that the company first needs to "eat its own dogfood," indicating that the 18A process would be primarily used by Intel itself. While Tan looks outward for business development, he's turning inward to try to fix corporate culture, flattening the organization, which grew fiercely in recent years as it staffed up to build the foundry unit. Intel said on its April earnings call that job cuts will come this quarter, though the company didn't provide a specific number. An Intel representative declined to comment on the matter. Intel announced in August, while Gelsinger was still in charge, that it was laying off 15,000 employees and would explore cuts in its portfolio. Wall Street welcomes more belt tightening but warns that the company can't cut its way to a successful revival. Deutsche Bank's Ross Seymour, who recommends holding the stock, wrote in a May note that, even with the "welcome and necessary cost-cutting actions," the company's "path to meaningful earnings/free cash flow generation remains cloudy and highly dependent on a turnaround" in the foundry business. Equally important to Tan is getting rid of what he views as too much bureaucracy. "It has been eye-opening for me to see how much time and energy is spent on internal administrative work that does not move our business forward," Tan wrote, in a memo to employees in April. He said Intel would have to learn how to do more with fewer people and that employees must be back in the office for at least four days a week by September. "I've been surprised to learn that, in recent years, the most important KPI for many managers at Intel has been the size of their teams," Tan wrote, referring to key performance indicators. "Going forward, this will not be the case." Tan also promoted several engineering leaders, giving him greater visibility into the organization. Zinsner said Tan has between 15 and 17 direct reports, because he wants to be closer to the "lowest" levels of the organization. "He's hearing the good, the bad, the ugly of what's going on, so that he can help address those," Zinsner said.
