I have only posted twice on this subreddit so I’m still learning to make DD posts.
I have been an Intel bull for a while, I have built computers and studied computer tech since I was in middle school so I understand Intel and it’s products.
Intel’s share price has had a bumpy ride over the past couple years, mostly trading sideways, and giving up gains very soon after achieving them. Intel as a business has had very poor management as intel for a long time has essentially been complacent in its innovation because of lack of competition. Intel only 5 years ago was far ahead of where AMD was (AMD being its most well recognized competitor) this has changed now that AMD has been able to outsource its chip manufacturing to TSMC, which is a Taiwan semiconductor company that produces the smallest chip and most dense chip designs that are available. This partnership has allowed AMD to eat away and Intel’s market share over the past 2-3 years, but there are many overlooked reasons for why Intel should still be considered a boof value buy.
Intel is it’s own manufacturer. Intel is not like AMD as intel has its own fab factories meaning they don’t have to outsource there products to other companies. This will be huge for intel as the chip trade war heats up, Intel will likely receive large subsidies from the US government as Intel is the only US based chip manufacturing company.
Intel is expanding into new markets. Intel has as of this year expanded into graphics processing. A market that was completely dominated by Nvidia for decades. This is a very good and logical expansion of intel’s market. Intel is also partnering with other companies to try to create new processing technologies. Intel has also announced all new fab factories that will be completed by 2023.
Intel has had a refocus and has gotten new leadership. Intel has a new ceo (Patrick Gelsinger) Gelsinger has done a fantastic job refocusing the company on innovation, and if AMD is any example of how changing leadership can rejuvenate a company, then this should be great for intel’s projected growth, as AMD’s ceo (Lisa Su) has saved AMD since she has started working as there chief executive.
Intel is in a exponentially growing market. The chip industry is a very high growth sector. This has helped intel as its lack of innovation has been offset by its sale performance the past few years. Investors just need reason to believe intel will grow with its completion in order to feel confident in the company as an investment.
My last point is that Intel is fundamentally undervalued. The other chip companies in the industry have average P/E ratios around 35~40 intel, however, has a P/E ratio of 12. This ties into my previous point that investors just need reason to believe in intel’s long term growth, and once they have it intel will likely skyrocket. Intel also has the greatest market cap out of its competitors and has the lowest price to book value and not to mention billions in free cash flow. Intel is also a high dividend stock with a dividend of 2.48. while AMD and TSMC offer no dividends.
I will edit this post as I find more information that I didn’t cover.
Thank you for reading! And all criticism is welcomed!
Submitted June 29, 2021 at 12:44PM by BooBeef https://ift.tt/2TmGAuO
