Take hold of the bull by the horns. Investor Remarks on Intel Stock
The stock of Intel () has been on a long-term decline, reflecting the company's decline from power. Intel, which once controlled more than 90% of the CPU industry in its Wintel heyday, is currently dealing with chip supply delays, declining market share, and waning investor confidence.
However, one investor, who goes by the handle Oakoff Investments (OI), advises against giving up just yet. OI feels that the stock is an excellent opportunity at the moment and that the market is being "overly gloomy" about it.
"The INTC stock price has a huge upside potential for patient value investors, but I think it is too low to stay there." I chose to stay positive on INTC today for that reason.
Intel's new CEO, Lip-Bu Tan, is an ace in the hole that propels OI's positive thesis. He is the "ideal corporate personality, who can flip the traditional script of Intel's past and make it develop sustainably in the next several years," as he is a "titan of the industry."
In order to create a "engineer-driven culture," Tan has stated that removing the bureaucracy that has slowed Intel down is his top objective. His goal is to completely transform the business such that the focus is on helping those who actually create and construct the goods. For this reason, he thinks the cost structure needs to be completely redesigned, with an emphasis on R&D instead of substantial SG&A expenditures.
According to OI, the office administrative workforce should be the main target of Intel's 20% workforce reduction, not the people in charge of INTC's future business turnaround.
With upcoming products like Granite Rapids, Clearwater Forest, and Diamond Rapids, Intel appears to be able to achieve its goal of stopping the decline in its market share in the data center and space this year. In an effort to provide a strong substitute for Arm-based custom silicon solutions, the company is also making a strategic shift by opening up its x86 architecture and utilizing its vast software ecosystem.
Given that Intel continues to incur enormous operating losses, the foundry division is undoubtedly still the largest wild card in the company's turnaround story. However, Tan's strategy of introducing the 18A process with an internal product initially appears to be the "most logical and de-risked path forward." Now that important partners like Synopsys and Cadence are contributing to the development of the wider ecosystem, the goal of breaking even by FY27 is beginning to appear more attainable than it did a few months ago.
As Tan's plan takes shape, OI believes that there is a "strong buying opportunity for contrarian investors out there, with a potential to see INTC much, much higher in the next few years." As a result, OI recommends buying INTC shares. (To view the history of Oakoff Investments,
Only one Wall Street analyst, however, concurs with that thesis, and the stock has a consensus rating of Hold (i.e., Neutral) based on an additional 26 Holds and 4 Sells. The stock is expected to remain range-bound for the foreseeable future, with an average price target of $21.29.
