Pythia Cap
Equity Investing & Market Satire
Intel is benefiting from this upcycle as a CPU maker and as an overflow and swing producer in foundry, and swing producers always rally more than the low-cost producer in an upcycle. TSMC, Nvidia and ASML showed restraint on capex and pricing, which extended the cycle but cost them volumes that bled to Intel. Stocks run on rate of change: Intel going from dead to maybe not dead was a better long than TSMC going from alive to more alive. x.com x.comÂ
Intel's production was reportedly affected by a pause at its Israel fabs, which should benefit competitors Arm and AMD. Both look good on that basis. x.comÂ
Intel's poor EMIB-T packaging yields threaten its plans for next year. Per a confidential source, yields are very poor, and EMIB-T may now slip into the following year. The 14A PDK 0.9 matters more for the long term. Intel remains a very strong long-term bull case because yields should improve, though setbacks can arise along the way; whether to avoid this near-term risk is a personal judgment. x.com x.com x.com x.com x.com x.comÂ
Intel's high valuation is hard to justify while its foundry turnaround remains unproven. At about 59x forward earnings, nearly three times TSMC's 19x, Intel has slower projected revenue growth; its foundry lost $2.09 billion in Q2 2026, while TSMC's Q3 operating margin was 58.7%. A politician's stock purchase alone does not make Intel a buy. x.com x.comÂ
Intel's latest earnings call confirmed it is executing on the three semiconductor bottlenecks it addresses, CPUs, advanced packaging and fab capacity. Beyond the obvious CPU shortage, its higher 2026 capex is a great sign, since Intel has often called a capex lift the key signal of 14A adoption. x.comÂ
Intel can go much higher because the CPU super cycle is just beginning, as the view that agentic AI is good for CPU demand gains steam. Much of Intel's move over the past year reflected an expected foundry recovery; the CPU business has only started to be priced in. x.com x.comÂ
Intel's valuation is at all-time highs while its business condition is near all-time lows. It is more a CPU company than a foundry, and TSMC holds huge scale, capex and process advantages while building substantial US capacity, so the recent rally makes no sense. x.com x.comÂ
TSMC may lose pricing power as performance gains shift from shrinking transistors to stacking, interconnects and optics, while logic folding could make older processes competitive. Despite strong leading-edge demand, investors may overestimate the profit share its node leadership can retain. Its cautious expansion and past reluctance toward advanced packaging suggest a risk-averse culture that protects returns but could leave it late to disruptive technologies and key customers. x.comÂ
Intel's comeback is backed by durable CPU demand and foundry revenue turning real. Per Reuters, Chinese buyers are locking in one to two years of server CPU volume from Intel and AMD, securing quantity rather than price, which signals durable demand rather than a spot-price spike. Intel Foundry revenue reached $5.8B in Q2, up 31%, and FY26 capex rose to $20B from $18B as new capacity meets a CPU cycle still running hot. x.com 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 is the answer to the industry's heavy reliance on TSMC, which faces too much overflow demand and single-point-of-failure risk. Another investor lists Nvidia, Broadcom, AMD, Apple, Google, Amazon, Microsoft, Meta, OpenAI and others as all depending on TSMC for their chips. x.comÂ
