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Focusing once again on earnings and Intel certainly on that list as we see it popping around in the aftermarket. What does that mean. We've got Intel shares down about three point eight percent as we speak, and some of it has to do with a week forecast supply shortages hampering sales. This is not a new story that we've heard around the chip companies, particularly when it comes to AI.
The demand is there, they can't meet the demand, which is kind of a good positive story that the demand is still there, but it's not great when you can't meet that and you're just you know, trying to kind of connect the dots.
Yeah, I want to bring an Ivan Fine Seth, research director and chief investment officer at Tiger's Financial Partners. The firm has more than five hundred million dollars under management and as a buy rating on the company's stock. Ivan does just very like your immediate knee jerk reaction to this, does your rating? Well, I know you can't answer that question, but your knee jerk reaction. I'm not even to ask your knee jerk reaction to the numbers here. You're shaking your head.
It's not this quarter. It's not a quarterly story. It is a major shift in the company. It's and they have I think turned a major corner. But the stock is also run up significantly from a lower twenty. It hit fifty five dollars, so I think it may have gotten a little bit ahead of itself and it may pull back. But I think everything that's going on, and then the new CEO, lip Pretend is is as planned.
I mean, they are well positioned to benefit from AI data center demand, AI computer demand, their partnership with Intel, money from the US government, so they are plenty flush to invest in all of their key growth initiatives.
So fundamentally, what's changed Ivan when it comes to this company? You obviously sound really upbeat. Is it just a case of having the backdrop because you know of the United States government? Is that what's done?
It?
You know kind of.
It's everything, Okay.
It's the It's first of all, it's the it's President Trump's push on what's sold here is made here, investing in US semiconductor manufacturing capacity here, expanding the Intel foundry business, as well as the growth of data centers, the growth of AI enabled PCs. So they are positioned, i think, perfectly to benefit from what what was in the early innings of we're going to be a long game of the AI driven growth in both the tech sector and the US and the global economy.
So okay, I just want to this is a different company than it was six months ago as a result of as a result of the US investment. And I'm wondering what that position, what that type of what that investment does for LIP. Butan's position like you know, when you're the CEO of a company and you come out with a report, you're you're obviously you got to worry
about the board, You got to worry about shareholders. Now he's got to worry about a phone call from President Trump because the President likes to talk about how well the stock has done since the US made that investment. What does that change the dynamic?
It doesn't.
But it's really funny that President Trump wanted to go from deporting.
The guy to giving the guy money.
Hey, that's the power of a conversation, right, But.
It also shows, but it also shows how quickly things can change, certainly from the White House perspective.
Well, it highlights Trump's perspective on driving the US manufacturing infrastructure, US leadership in all key areas, and semiconductors is a very important area, especially that Intel makes semiconductors for the defense industry.
Interesting. Okay, so does it make the defense business stronger?
Absolutely?
Hey, there's no better partner, one number one partner. I don't Well, it could be a tie US government and Nvidia.
Okay, so let me go to the partners.
Yeah, let me let me ask this question a different way than Ivan. And that's about where Intel would be right now. If the US government had not made that investment, would this be a completely different picture? Would it have been a completely different quarter?
Well, yeah, I think this has helped.
I think this removes concerns, balanceet concerns that moved and allows the company and the CEO to focus on business. A partnership with Nvidia is great, and partnership with the USK it opens up. They're back working with Apple, They're going to be working with everybody, and I think you're going to see Intel as a major contender as a sub reconductor foundry semiconductor manufacturer to take on Taiwan Semiconductor.
So okay, going back to Intel, under pressure in the aftermarket. We continue to track the share price I think down about four or five percent as we speak. The forecast
for the first quarter top and bottom line disappointing. At the same time, it's talking about the CEO saying demand is quite strong, says the chip maker missed a lot of opportunities, says production yields not up to his standards, and then he goes on to say making our Intel says the company making good progress in fourteen A production on track for volume production in twenty twenty eight, has multiple engineering engagements on fourteen A. Help me understand what that means.
These are different chips, the fourteen A, the eighteen A that they and the announcements that they made earlier this month at the SEA. They got their latest semiconductors on track to go into production to meet huge demand. Demand for all semiconductors is outstripping supply. There's in fact, concerns
of memory shortage and process or shortage. So they got the demand wind is that is a tailwind, and they are back to innovating and developing and work, you know, winning customers and working with key you know computer manufacturers, Key Hyperscaler, you know, cloud service providers. And I think that they got a tremendous tailwind.
The stock ringing up a lot. It went from twenty to fifty five.
Even though if it pulls back to forty five, you know, it's a buying opportunity because I think that long term they are going to be back. I mean I don't think even be back to their former glory. I think they are going to be one of the world's leading semiconductor developers, designers, and manufactor.
So the foundry Services division their factory unit revenue of about four and a half billion. It was a gain of about three point eight percent I've bean from the year before. It currently relies on almost exclusively as you know, Intel product divisions for orders. It's looking to expand beyond that. Is that crucial for the company's future growth.
It's crucial, But that is the opportunity, okay, to work with everybody, because you got to realize that most of the other semiconductor companies, even in Nvidia, Apple, all of the companies like Google, Facebook, Amazon, that want their own processors Qualcom. They're all virtual manufacturer. They don't actually manufacture. They outsourced to companies like tod Wan semi Coonductor and hopefully companies like Intel to manufacture their processors.
You know, is the US the US is at least from an investment protective things have kind of quieted down a little bit since the summer. But are there any other companies, particularly companies within your universe that you follow, that could see in your view and investment by the US government.
You know that I don't know. The other companies that I like in the semi conductor sector are in Vidia and Quailcom. And you know, in Vidia is pretty flush.
Yeah they need so.
Okay, they could they could make an investment in the US government.
Yes, I really think it was great how it turned around after the meeting with Trump and Tan that Trump wrote a check and and also we have a lot of government incentives to build UH semiconductor manufacturing capacity here.
Yeah, we have projects.
In Arizona, projects in Ohio. So ideally the US could be the semiconductor manufacturing capital for the world.
So in terms of going back to a new right, hoefully so I even point out the run up that we've seen in Ivan shairs and Intel shares. You know, the information put out a story and it says Intel's forward even a multiple has lifted to twenty times highest level since twenty twenty one, well above the twelve and a half times at which TSMC currently trades. This is what I was trying to get to before with our simulcast. I was talking to market caps, but it has to
do with valuation. Intel now pricier than TSMC. Does that make sense?
Well, I always say I wish we could solve the mysteries of the stock market by dividing two numbers like cash flow or even pe. Stocks go up for everything that you really can't measure. And this is about Intel's future. So we are going to see if all goes well, a huge ramp up in revenue, in expansion in margin
and increasing cash flow and then in increasing profitability. So I think their foundry business will ramp up significantly, and as their new processors come to marke get revenue and cash flow and profitability will ramp up also ramp up significantly.
Yeah, Lip Bhutan saying, you know, Intel face is an execution challenge. We are laser focused as a team to improve that to be candid. It's just our execution that needs to improve. Ivan fine Seth, great stuff, as always so appreciated. He's, of course, chief Investment Officer over at Tiger's Financial Partners, joining us on Intel