NVDA - Intel: CEO Gelsinger Fulfilling The Goals While Reducing Uncertainty

2024-03-19 11:20:37 ET

Summary

• Intel Corporation is fulfilling its roadmap with the production of Intel 7, Intel 4, and Intel 3, gaining credibility for its ambitious goal of "5 nodes in 4 years."
• CEO Pat Gelsinger's leadership has been crucial in achieving these milestones and driving a successful turnaround.
• Intel's capital allocation strategy and funding methods, such as partnerships and IPOs, are supporting its growth and innovation plans.
• I rate Intel Corporation stock as a Buy.

I rate Intel Corporation (NASDAQ: INTC) as a buy as the company is fulfilling its roadmap as expected. Intel's ambitious goals of "5 nodes in 4 years" are gaining more and more credibility as the Intel 7 (which is an enhanced version of the 10-nm SuperFin), the Intel 4 (which is the 7-nm), and the Intel 3 (which is an enhanced version of the Intel 4) are already in production. This is a very important scenario for Intel, as some analysts thought that with the use of the EUV for the first time to produce Intel 4 and Intel 3, Intel might face some delays, a similar situation when Intel suffered the delays of the 10-nm some years ago.

In my view, the leadership of Intel CEO Pat Gelsinger was crucial to achieving these milestones. His leadership was one of the main factors that would increase the chances for a successful turnaround, which was mentioned in my previous article written in June 2023 to develop a bullish case for Intel when the stock price was trading at around $35 per share. In that article, I explored Gelsinger's performance as CEO of VMware from 2012 to 2020 to get some insights about what to expect about his future performance at Intel; apparently, my prediction was on the right track. In addition, in that article, I explored Intel's capital allocation in the last decade to compare it with that of Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM) aka TSMC, where I showed why TSMC performed way better than Intel in all that period....

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