TSM - Intel: Turnaround Is Working I'm Bullish

2024-06-14 09:35:52 ET

Summary

• Intel's stock has dropped almost 40% YTD due to slow traction in AI compute sales and declining share in the data center market.
• Despite what initially appears to be disappointing Q1 results, Intel is showing signs of a turnaround with revenue growth in key areas and strategic investments.
• Intel's upcoming launch of the 18A Panther Lake CPUs and strong partnerships position the company for future growth and market leadership.
• In essence, the turnaround appears to be working under the surface, I am bullish.

Investment Thesis

While I have been bullish on Intel (INTC) since last fall I will admit, the company has faced a tumultuous start to 2024 with their stock performance plummeting approximately almost 40% from January to present.

Intel's faltering stock price is largely attributed to their slow traction in the realm of artificial intelligence compute sales relative to competitors such as Nvidia (NVDA) and AMD (AMD) where the company has lost ground in the AI and server segments????. Intel in recent history has struggled to pivot their business model and product line in the past years that has resulted in a declining share in the data center market since 2021, which was once a stronghold for the company. With the company introducing the Gaudi 3 AI chip, the company has a new angle on the AI market, but this will take time to ramp up....

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