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Comment by versale | Hacker News Reader

Intel’s P/E is 7 right now. So, the other ratios do look inflated.

That’s because the market calculates a high probability of an Intel implosion

With an engineer on the helm, rehiring big names in the field, opening more fabs, and having access to TSMC's newest node over AMD[1].. it seems unlikely.

[1] https://www.extremetech.com/computing/334897-amd-might-have-...

If you know something the market doesn't know, and you're confident that you're right, then put all your eggs in that basket: that's how one beats the market.

(Don't follow this advice, I'm just a dude on the internet, this is not financial advice and my background is biochem + software, not finance)

I'd put my eggs in some Dutch company cough asml cough that has an enormous backlog and controls a segment of the manufacturing process ;).

But what do I know, I am just a grad student.

Not a bad long-term bet IMO! I’m partial to both ASML and TSMC.

ASML is a fantastic business to own but has a price tag to match. Intel might be good and is selling for a song.

Might help if people checked this out first - https://en.wikipedia.org/wiki/Kelly_criterion

Intel has to do next 4 years what it failed to do for the past 8 years and the complexity of execution in the space is getting harder and hander. Also, they are fighting on multiple fronts, upstarts in GPU, write-offs on AI hardware, Losing share of x86 with ARM et al. Losing share in x86 to AMD, having to rely on TSMC for advanced chips. Also, some bright spots where, they are opening up their foundries for design firms etc.

Over all, Intel has to do perfect execution and we did not fully talk about Apple, Amazon, Microsoft designing their own chips and using Intel's competition for fabbing them. They are in a tough spot, but if any company can come out of it winning, its Intel. They have done it before.

With the rise of AI chip startups (Jim Keller has one) and a voracious demand for chips, perhaps their fabs may allow them to weather the storm.

If I were putting money anywhere, it'd be in ASML... but their shares are too expensive for my poor grad pockets.

Yeah, I don't know how to feel about Intel.

Intel has been a crappy company to work for and doing a crappy job for a long time, but I'm willing to bet they still have enough highly-experienced geniuses on hand to pull through

Why?

They’ve got plenty of cash, and they’re still the strong leader in the server space. AMD is eating away at their consumer grade cpus I concede.

I would be shocked if we had an intel “implosion” they have a sustainable and successful business model and there’s no world where we need fewer processors.

AMD is probably making more progress in server right now.

"Implosion" is probably an exaggeration, but with AMD strong, and competitive ARM offerings (Apple silicon for end user devices, and Amazon with their own ARM processors on server), most people are speculating that they will eat into Intel's profit. The fact that Intel can't produce a competitive GPU in an environment where the GPU is becoming more and more important (for various reasons) is also something against them.

Intel has most of its (cpu) market right now so not exactly a growth stock. The market doesn’t believe in the new growth potentials (gpu, fabs). Intel also pays 3.3% dividend right now, not exactly a growth strategy. Also, the market may stay irrational for a while. Also, many investments are in the form of funds, etfs etc. so stocks will tend to move together, esp if in the same sector.

Blue chips and intel in particular always had low p/e

For some values of “always”. In 1972 Coca-Cola traded at 48 times earnings.

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