Intel: Still Likely To Underperform (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• The market is more confident on Intel's earnings than revenues due to headcount reductions and slower-than-expected uptake of Gaudi 3.
• Management has promised positive adjusted FCF by 2025. However, I am more concerned with GAAP positive FCF, which is not expected to occur over the next 3 years.
• Intel's Valuation multiples are still above longer term median levels. Due to its worse competitive position, I don't believe Intel deserves a premium over its historical valuation range.
• Relative technicals show no signs of multi-quarter bullishness. The incumbent downtrend is still strong and intact.
• Biden's government has reduced the direct funding to Intel under the CHIPs Act. And the incoming Trump administration may curtail this further as a result of preferring tariffs over subsidies to support the US semiconductor industry.

Read the full article here.