Ted Zhang
Portfolio Manager of Turbotection at Revere Asset Management
Intel's foundry may be closer than the market assumes because its UMC 12nm partnership brings external-customer experience and a more customer-friendly design kit. Musk said Terafab plans to use Intel 14A, with Tesla and SpaceX building and running the fabs themselves; that would be an important outside test. Intel still must prove yields, volume and schedules, while Terafab's commercial terms remain unclear. Still bullish, but not enough to add now. x.comÂ
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 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
US sovereign AI and defense demand for domestically made compute will bring Intel most, if not all, US semiconductor designers as customers. PC weakness also lets Intel shift wafers to higher-margin server CPUs, but that takes a few quarters; capacity to ship more server CPUs is the limiter. The $240 billion 2030 server CPU market forecast is a stretch case, not the base case, versus roughly $200 billion consensus. x.com x.com x.com x.com x.comÂ
Intel is the favorite semiconductor pick as value keeps accruing to AI's infrastructure layer, and its $20B equity offering clears the funding overhang despite about 5% dilution. Agentic AI's impact has at least a year to run: token production is up about 7.5x since January, OpenAI and Anthropic's combined run rate is near $100B, and big-cloud revenue growth hit 43% with margins expanding. Risks include 5.3% long-bond yields and weak mid-term-year seasonality, so add hedges and be selective. … Show more
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's government backing signals that it will sit at the center of where the semiconductor supply chain is heading. The US government's $8.9B stake, bought at $20.47 a share in August, is up 315%, a $28B gain, and Nvidia followed with $5B just 27 days later, which is a signal, not a coincidence. The government does not buy $8.9B of anything it plans to let die, so never fight it when it puts capital behind something. 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 looks a tad overvalued near $100, so it is not a buy right now, even though its fundamentals are strong. It is state-backed, demand is so high that lower-grade chips are sold rather than discarded, and its downstream stack, including EMIB packaging, is the strongest in about a decade, possibly outpacing its foundry business per Morgan Stanley reporting. x.comÂ
Intel features in the week-ahead market outlook. x.comÂ