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Comment by gogopuppygogo | Hacker News Reader

Good time to buy Intel stock if you think it’s bottoming out.

They’re not even close to the bottom. Their current product line up isn’t the best and the future is bleak, but the market needs their fab capacity. The bottom will occur as competitor production capacity relative to demand improves. Part of this is pandemic related, too, as COVID has reduced production and caused a spike in demand.

Meanwhile, there's a shortage of foundry capacity. Automakers are pausing assembly lines because they can't get chips. So yeah, Intel isn't making the best chips, but they're still making ok chips, there's a chip shortage, and things could look different in 5 years.

Not saying I'd bet on them. I'd probably not bet either way. I just think the "future is bleak" narrative is overplayed.

AMD took nearly twenty years to recover from it's original heights.

Things move sloooooowly in the world of manufacturing.

https://invst.ly/tj4ss

This is the graph for the stock price of Intel over the last 25 years. Doesn't look like it's bottoming out just yet...

Not a good time if you don't think they'll ever recover.

They will recover, but we're not at the bottom yet.

I think the stock will hit rock bottom in early-to-mid 2022. It'll start to climb around Q2 2023 when new products on working Intel nodes are announced. Once those products are reviewed and performance is at parity or better than AMD / Apple products, it'll rebound.

And they will have to recover, one way or another. Intel is now a strategic asset. TSMC is too close to mainland China to risk losing access to, the Arizona fab won't be online for at least 3-5 years, and its capacity is tiny compared to the main fab in Taiwan. Samsung can't afford to share capacity because whatever portion of their fabs aren't used for Samsung products, the rest is locked up by NVIDIA, which literally every researcher needs because GPU-based compute is now dominant.

Intel has to succeed, and if they can't do that on their own, the United States government has to step in, in some way. They did it for a bunch of shitty bankers in 2008, they can definitely do it for an industry that produces an actual, tangible product.

If it has come so far that the government has to steps in than they are probably done. Once government starts to bankroll them, they'll have no incentive to be competitive and all the smart creative people will leave for better pastures.

So a bet on INTC would be for government bailout? I'd say it has a long time to fall still then.

I don't know whether Intel will ever need government bailout. If however it does need it, it will probably be game over for them to ever become a leader again. There will simply be no incentive for them to innovate.

Available evidence suggests otherwise.

Tesla and SpaceX probably wouldn't exist if not for government bootstrapping. https://www.latimes.com/business/la-fi-hy-musk-subsidies-201...

Further back, modern computing / internetworking wouldn't exist without military and DARPA cash from the government. Read any book on the history of these.

There's a difference between the government paying for or subsidizing a needed service and the government bailing out a specific company after that company has failed to compete in the market. Successful industrial policy, like the sort South Korea practiced, requires backing the winners not rescuing the losers.

Lockheed and Boeing would both easily get government bailouts if it came to it, for the same reason I believe Intel would.

America can no longer cede ground in high-tech manufacturing to anywhere else in the world.

Hong Kong should have been the wake-up call for this. If China can subjugate Hong Kong, they can subjugate Taiwan. I'm not convinced the average American would support a war against China to free Taiwan, even if it did mean no more iPhones for them.

So the only other option is America has to return to being a bastion a high-tech manufacturing. The Wall Street types don't like this because it doesn't make them enormous margins. They're under the belief that offshoring everything will be fine, because to their mind, commerce and trade are the most important things in the world. They lack the mentality to understand that Communist China simply does not share this mindset.

That should be obvious with China "re-educating" their version of Elon Musk or Bill Gates or Mark Zuckerberg or whoever you want to compare him to - Jack Ma. No one is above "the Party". This isn't something that Wall Street types understand, because this is extremely bad for business, and they don't "get" why someone would sabotage profits for ideology. I would call it a Western failing, but frankly it was America and our Allies that failed in World War II. We should have listened to Patton and finished off Stalin, and then went to work on Mao, but we lacked the courage to do it.

Now this is where we are.

Getting the government involved does not change the makeup of engineers or organizational antics; if anything, government involvement makes the entire thing worse. Intel has soft resource problems (managerial, talent), not hard resource problems (money, access).

If Intel is not shook from the top down, this story will not end well.

The thing that US government needs is to ensure that at least a reasonable part of modern chip manufacturing happens on US soil and not across the Pacific. The way they can step in for that is with subsidies for US-based fabs. However, do they need to be Intel fabs? TSMC might as well fulfil that need if they can be motivated to build fabs in USA.

INTC was at $120 when I joined, and my option was $76 - 1997

It is at $58 today

Splits.

Tesla was at $38 a few years back.

Now its at $860ish.

Splits.

If you really wanna go nuts, the stock split king for tech is Microsoft, with 9, yet its also at its highest point per share than ever.

Stock splits aren't a good reason for a low stock price, in fact, usually if a stock is hot enough in demand to split, after the split, the prices almost always eclipses the pre-split price.

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