Futurist
Photonics, Space, AI Infrastructure & Robotics Commentary
Intel is set to explode as it gets pulled into the biggest AI and robotics buildout through a reported team-up with SpaceX, Tesla and xAI. While written off as old tech, it quietly rebuilt by cutting costs, reshoring fabs and securing government backing for US chip leadership, and smart money began accumulating in 2024. x.comÂ
Intel is a leading semiconductor name that benefits massively from US government investment and a likely Terafab collaboration with Tesla and SpaceX's xAI. Its chart is forming a textbook high-tight flag. x.comÂ
SpaceX's AI business and profitable growth challenge calls for its stock to go much lower. Q3 revenue reached $14.6B, up 161%, with $4.4B profit and $7.6B from AI. A Tesla merger is being discussed. x.comÂ
Intel faces massive capital raises because its CFO warned it must invest substantially more in substrates while the company is losing money. OpenAI's chip effort adds to the sense that the market is calling Intel irrelevant in the sector, with major outflows. x.com x.com x.comÂ
Investors are aggressively funding Intel as an AI infrastructure manufacturer: its upsized $20B stock offering drew over $100B of demand, about 5x oversubscribed even after a huge run. The capital supports its push to high-volume 14A production by 2028 across foundry, advanced packaging and AI silicon. Tesla and Terafab as anchor external customers make this turnaround more credible than past ones. The cost is roughly 5% dilution. x.comÂ
Intel stands to benefit as agentic AI drives more CPU demand, with Intel, AMD and Arm direct beneficiaries. A potential SK Hynix partnership, U.S. government backing and a continuing foundry turnaround add support. Technically, Intel shows one of the best cup formations in the market, with price tightening just below its downtrend line after a big run and weeks of cooling off. x.comÂ
Intel is overvalued after running up about 5x from $20, with more capex, low operating margins and a run-up driven largely by Trump's promotion rather than fundamentals. TSMC earns over 30% operating margins and is ahead of schedule in Arizona, so Intel has no US fab monopoly. Trump leaves office in two years, and these fabs are unlikely to meaningfully improve on existing 2nm yields. It could still be a great trade. x.com x.com x.com x.com x.comÂ
Intel heads into earnings with strong capex tailwinds pointing its way. SpaceX raised $80 billion in its IPO, much of which is going to Intel, and Tesla raised capex with much of it also headed to Intel. Alphabet's higher capex is bullish for all chip trades, and every AI name reporting so far has blown expectations away. x.comÂ
Strong AI demand and hyperscaler spending make the selloff a mid-cycle correction despite neocloud financing stress. Widening CCC spreads expose leveraged firms to higher borrowing costs; US competition with China supports AI buildout. The base case is a bottom in roughly 5-7 days, then stabilization and eventually a broader reversal, though some projects may fail and valuations compress. IREN, Cipher, Nebius, Applied Digital, Micron, AMD, ASML and Intel are worth gradually accumulating. x.comÂ
Intel and AMD face a real shift in competition as NVIDIA moves into CPUs faster and more directly than expected. On NVIDIA's earnings call, Jensen Huang said its new Vera CPU platform will contribute $20 billion of standalone revenue this year. The pressure on Intel and AMD is not just fund rotation but a genuine change in the competitive landscape. x.comÂ
Fresh funding for AI expansion supports a continued bid for AI stocks as compute spending shows no sign of slowing. Meta committed to $95B in shareholder dilution for AI, Anthropic is set to have $200B in cash in a couple of weeks, and SpaceX got a $40B Apollo loan solely to buy more Nvidia GPUs. The Anthropic IPO might even be a positive catalyst rather than the negative one many fear. x.comÂ
