By Nigam Arora & Dr. Natasha Arora
Signal(s) to enter, add, reduce, exit, hold or change.
Attractive Valuation
Many artificial intelligence stocks are very expensive. Intel (INTC) is a laggard both in terms of design and manufacturing. However, it offers an attractive valuation.
The Shift
Artificial intelligence computing is shifting from CPUs to GPUs. INTC primarily manufactures CPUs and has fallen behind in GPUs.
Manufacturing
INTC has fallen far behind Taiwan Semiconductor (TSM) in manufacturing high performance artificial intelligence chips.
National Security Angle
TSM is based in Taiwan. TSM is the prize that China wants to capture. We have been writing about the risk of China attacking Taiwan. The U.S. government is keen on developing manufacturing capability in the U.S. TSM is also developing a foundry in the U.S. However, Intel is trying to catch up.
Diversification
Many semiconductor manufacturers including Nvidia (NVDA) want to diversify their supply chain. This is giving INTC an opening.
Nvidia Comment
NVDA is the undisputed king of AI chips right now. AMD is far behind. In Taiwan, the CEO of NVDA said that he is open to working with INTC. He also said that the performance of test chips from INTC has been good.
Positive Tone
INTC struck a positive tone at an investor event.
INTC is guiding Q2 revenue at the higher end of the $11.5B – $12.5B range vs. $12.03B consensus.
Zones
Consider buying INTC only on a pullback.
For those following the Good Way, the Buy Now rating is 🔒 (To see the locked content, please take a 30 day free trial).
For those following the Best Way, the buy zone is 🔒.
The recommended quantity is 🔒 of the full core position size.
The tentative plan is to buy more if the stock goes lower, but you will need to stay tuned to the Real Time Feed.
The stop zone is 🔒.
This is a very long term position. The very long term target zone is 🔒.
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Nigam Arora
Nigam Arora is known for his accurate stock market calls. Nigam is a distinguished master of the macro. He is a popular columnist with over 100 million page views, an engineer, and nuclear physicist by background. Nigam has founded two Inc. 500 fastest growing companies and has been involved in over 50 entrepreneurial ventures. He is the developer of Theory ZYX of Successful Change Management and is the author of the book on Theory ZYX, as well as the developer of the ZYX Change Method for Investing.
Dr. Natasha Arora
Dr. Natasha Arora has significant expertise in investment analysis especially biotech, healthcare, and technology. Natasha is a graduate of Harvard Medical School followed by a postdoc at MIT. She has published several peer reviewed research papers in top science journals.
