Latest news with #LipBuTan
Globe and Mail
a day ago
- Business
- Globe and Mail
'…One Something of Volume…' Intel Stock (NASDAQ:INTC) Slips as it Looks for Customers
While we know that chip stock Intel (INTC) has been pushing, and pushing hard, to build a lot of new chips through its foundry operations, the problem is a matter of what to actually do with those chips when they are built. Intel is on the hunt for customers, and the search is proving a bit more difficult than expected. And Intel's shareholders are starting to get concerned, again, as shares slipped fractionally in Thursday afternoon's trading. Confident Investing Starts Here: Basically, noted The Futurum Group CEO Daniel Newman, Intel needs at least one major customer to get people to believe it has a future in the foundry front. 'One Nvidia (NVDA), one Qualcomm (QCOM), one Apple (AAPL), one something of volume that really shows this meaningful commitment to the fab to build significant volume would really change the whole narrative,' Newman noted. But perhaps worse for CEO Lip-Bu Tan, Newman noted, is that there are a lot of problems that were there before Tan's tenure, as the foundry business takes a lot of capital to start and has a long runway to success—we had heard earlier that Intel should break even on the foundry operations in 2027—and Intel itself faces fundamental challenges like a growing reliance on graphics processing unit (GPU) chips over central processing unit (CPU) chips, particularly in artificial intelligence (AI) applications. Thus, the call for one big customer to help validate the unit. A Loss of Face in AI Even as Intel faces concerns that it is irreparably behind in AI advances, it may have just proven as much. Reports noted that Intel lost a few of its executives to join a coalition of others that are setting up AI chip startups in India. A coalition of four went to Bengaluru to set up Agrani Labs, which is developing its own AI chips in-house, and working with Peak XV partners to land $8 million. But Intel is not exactly out of that fight; Intel's CEO, Lip-Bu Tan, actually put some cash into one such effort staged by former Texas Instruments (TXN) employees, Bodhi Computing. The rise of firms in that field, operating out of India, makes it clear that the AI chip market is one that is likely to grow substantially in short order. But the question that remains: will Intel ultimately be left behind? Is Intel a Buy, Hold or Sell? Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 26 Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 32.53% loss in its share price over the past year, the average INTC price target of $21.29 per share implies 5.37% upside potential. See more INTC analyst ratings Disclosure Disclaimer & Disclosure Report an Issue
Globe and Mail
3 days ago
- Business
- Globe and Mail
Intel Stock Is a Speculative buy Because of This 1 Factor
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. The reason to buy Intel 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. Making sense of Intel's book value 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. Investing in Intel stock 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. Should you invest $1,000 in Intel right now? Before you buy stock in Intel, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks 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 is982% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. 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.
Globe and Mail
5 days ago
- Business
- Globe and Mail
‘Give This Underdog Some Love,' Says Top Investor About Intel Stock
The narrative around Intel (NASDAQ:INTC) during the first part of this decade has largely been shaped by missed opportunity. Unlike some of its competitors, the Silicon Valley pioneer failed to take advantage of the AI wave – and its share price has lost almost 70% of its value over the last five years. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Intel clearly understood that it needed to make a course correction and the board brought in Lip-Bu Tan to head the company. Tan has outlined an ambitious vision, seeking to make Intel an 'engineering-focused company.' He has also stated that one of his first actions as CEO was to learn the ins-and-outs of Intel's progress with its 18A technology. Notably, Tan has expressed his belief that Intel has a 'vitally important role' in supporting advanced semiconductor production. One top investor known by the pseudonym Tech Stock Pros agrees that the 18A has the potential to propel Intel skyward. 'Intel's 18A will carry it to new heights, and the more negative the market gets on this name, the more attractive it is to us,' asserts the 5-star investor, who sits in the top 3% of TipRanks' stock pros. The company will enjoy two major benefits if it is able to successfully produce 18A, explains Tech Stock Pros. The first will be in the CPU market, as the technology will give Intel an advantage over key competitor Advanced Micro Devices – which has been clawing away market share from Intel in this segment. The second benefit will be to demonstrate Intel's ability to serve as a 'reliable foundry player.' Right now, there is not much external demand for Intel's high-end nodes, notes Tech Stock Pros, who adds that the market does not seem to think Intel will attract customers for its foundry business. Ironically, Tech Stock Pros thinks these doubts can be a plus for investors. 'Low expectations make for more dramatic stock price reactions when better-than-feared news breaks, and we think that could be the case with 18A's successful ramp in Q4 and early 1H26,' adds Tech Stock Pros. The 18A launch is therefore quite a good reason to shower this underdog with some love, notes the investor. 'Intel could be back at the $40s level after 18A is successfully out; it'll expand margins, enable share regain on the PC Client front, and put the company on the map as an advanced foundry player,' concludes Tech Stock Pros, who rates INTC a Buy. (To watch Tech Stock Pros' track record, click here) Wall Street, however, is firmly on the fence on this one. With 26 Hold ratings – to go along with 1 Buy and 4 Sells – INTC has a consensus Hold (i.e. Neutral) rating. Its 12-month average price target of $21.29 has an upside of ~6%. (See INTC stock forecast) To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
Yahoo
23-05-2025
- Business
- Yahoo
Intel Could Sell Another Major Business in Turnaround Bid
Intel is reportedly looking to sell its network and edge businesses. This would continue a trend of exiting noncore businesses. While a spin-off or sale would be complicated, refocusing on PCs, servers, and manufacturing makes sense. 10 stocks we like better than Intel › For years, semiconductor giant Intel (NASDAQ: INTC) has been exiting lines of business that don't fit with its overall strategy. Under former CEO Pat Gelsinger, Intel sold off its NAND and SSD operations, wound down its Optane memory unit, spun off Mobileye via an initial public offering (IPO), exited the prebuilt server business, gave up on Bitcoin mining chips, and sold a minority stake in its IMS Nanofabrication business. New Intel CEO Lip-Bu Tan will likely continue this trend as he refocuses the company on what it does best: namely, PC central processing units (CPUs), data center CPUs, and manufacturing. Intel sold a majority stake in field programmable gate array (FPGA) specialist Altera in April, and the company is now reportedly eying its network and edge businesses. Reuters reported on Tuesday that Intel was considering selling off these businesses, which were formerly reported under the NEX segment but consolidated with other segments starting in the first quarter of this year. While divesting the former NEX segment could be trickier than some of Intel's other exits, it would free Intel from yet another distraction as it refocuses on its core businesses. The businesses that were once part of the NEX segment focus on solutions for telecommunications networks and edge computing applications. This includes radio access networks, which connect base stations to individual mobile devices, as well as products aimed at the retail, healthcare, manufacturing, energy, and transportation industries. The NEX segment generated $5.8 billion in revenue during 2024, along with an operating income of $931 million. That works out to roughly 12% of Intel's total products revenue and 7% of Intel's total products operating income. These businesses are meaningful revenue generators but don't contribute much to the bottom line relative to PC and data center CPUs. While Intel has major competitive advantages in the PC and data center CPU markets, that's not necessarily the case in markets served by its network and edge businesses. In PCs, Intel is part of a duopoly with AMD, and competition from Arm-based CPUs has started to ramp up only recently. In the data center, while custom Arm-based CPUs are becoming more common, Intel and the vast ecosystem around its chips still reign supreme. Although Intel leads the radio access network (RAN) market, the company is exposed to the ups and downs of telecom capital spending trends. Arm is making a push to create chips based on its intellectual property (IP) viable for RAN deployments, which raises the prospect of greater competition in the future. The company also competes with Broadcom in multiple areas. The NEX businesses share a lot of IP with Intel's PC and data center businesses. The company sells chips aimed at edge computing workloads under its Core Ultra brand with a mix of architectures, including Arrow Lake and Raptor Lake. Intel also offers Xeon 6 chips for RAN networks and other applications, which are variants of the company's server CPUs. Intel manufactures its Xeon 6 lineup using its Intel 3 manufacturing process and its Raptor Lake chips using its Intel 7 process, while it largely outsources Arrow Lake production to Taiwan Semiconductor Manufacturing. With the former NEX segment intertwined with the rest of Intel, a spin-off or sale would likely be complex and take quite a bit of time to sort out. However, as it stands today, the NEX businesses aren't getting the resources or attention they need to thrive. With Intel focused on PCs, servers, and manufacturing, the company isn't going to win in the network and edge markets if it's viewed as an afterthought. A deal for the NEX businesses could raise billions of dollars in cash for Intel, bolstering the balance sheet and freeing up resources to invest in the manufacturing business. Part of Tan's turnaround plan is to simplify operations and make Intel more efficient, so exiting the NEX businesses would certainly make sense. While there's no guarantee Intel will proceed with any plans to exit its network and edge businesses, a sale or spin-off would be a step in the right direction as the company reins in the sprawl that has contributed to its current predicament. 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 $642,582!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $829,879!* Now, it's worth noting Stock Advisor's total average return is 975% — a market-crushing outperformance compared to 172% 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 Timothy Green has positions in Intel. The Motley Fool has positions in and recommends Advanced Micro Devices, Bitcoin, Intel, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Mobileye Global and recommends the following options: short May 2025 $30 calls on Intel. The Motley Fool has a disclosure policy. Intel Could Sell Another Major Business in Turnaround Bid 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
Globe and Mail
21-05-2025
- Business
- Globe and Mail
Intel Stock (NASDAQ:INTC) Slips as Intel Mulls Sale of Edge Computing and Networking Units
We know that chip stock Intel (INTC) has been suffering from a bit of a cash crunch since it put so much into setting up its foundry operations. We also know the foundry operations will not break even much before 2027, if at all. This combination of factors likely led to new reports that Intel is mulling a pretty big sale. Investors, though, were not exactly pleased, and sent shares slipping fractionally in Tuesday afternoon's trading. Confident Investing Starts Here: The latest reports from Reuters noted that Intel was mulling a sale of its network and edge businesses, both of these said to be part of the 'less than crucial' part of the business that new CEO Lip-Bu Tan has been previously seen as interested in divesting. But this does not mean more layoffs, the report noted, as the 'tens of thousands of employees' contained therein will be transferred into PC and data center chips, two of the new Intel's biggest operations. The report also noted that Intel has started the process of making the sale already, talking to 'third parties' that might be interested. However, this is still very early-stage stuff, as Intel has '…not yet launched a formal deal process for the NEX unit,' as it is known. Intel has also interviewed, but not yet hired, an investment banker to handle the deal itself. Actually, it has interviewed more than one, but the hire is still not made. A Lot of Little Makes One Big Further, we saw new word about a new strategy for Intel, as it looks to get a better foothold in the graphics processing unit (GPU) market. While most of that market is going to Nvidia (NVDA), Intel is looking to take Nvidia down by a death of a thousand cuts strategy. Essentially, Intel wants to offer cheap GPUs that can be used in tandem, allowing several of them to work together to provide similar power to the Nvidia line. Intel's Battlemage B60 card comes in at about $500 of the cost of a PC, though reports suggest the price might go higher when it goes live. That compares wonderfully to the $1,250 to $2,400 Nvidia's RTX 4000 Ada and 4500 Ada chips fall into, and even better against Nvidia's RTX Pro 6000, which comes in at $8,565. Thus, getting four or five B60s together will come in at a bargain against the 6000, and not be especially far off in terms of performance, reports note. Is Intel a Buy, Hold or Sell? Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 25 Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 32.64% loss in its share price over the past year, the average INTC price target of $21.22 per share implies 0.24% downside risk. See more INTC analyst ratings Disclosure Disclaimer & Disclosure Report an Issue
