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Comment by samspenc | Hacker News Reader

This is what I thought a few months as well and bought INTC (Intel stock) on the dip ... and it kept dipping.

This is my guess now: yes, Intel is a massively profitable company. But I think what the market is factoring in is that it missed the technology shift to smaller chips (5nm?) which its competitors (Apple, TSMC, etc) are able to do. Further, Apple & ARM are eating into the mobile space, and AMD and NVidia are biting away at Intel's data center share.

I think without a major tech break-through, Intel looks like it might miss this next semiconductor shift, and that's why the market is selling because it is starting to look like an also-ran at this point. Think IBM.

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ARM isn’t eating into the mobile space - ARM is the mobile space[0].

[0] https://www.statista.com/statistics/1132112/arm-market-share....

I also bought Intel on the dip - sold some AAPL to do it - and am going along for the ride. But part of my reasoning has less to do with the state of Intel's tech or even their competitive chances in the near term, than that they're an undervalued strategic asset for America in the context of an increasingly warlike China threatening Taiwan.

People don't appreciate how massive Intel's operations are.

I'd guess that they have teams making both ARM and RISC-V designs just to hedge their bets and offer something to those markets. People seem to forget that Intel used to have an entire ARM division with a license to do custom designs.

Intel is a value stock at this point. I have been loading up on shares, but it looks like the big money isn't interested in companies that make a lot, and more interested in "future potential for growth." I think some big hedge funds must be betting on intel failing.

> but it looks like the big money isn't interested in companies that make a lot, and more interested in "future potential for growth."

Why not both? Intel has been stuck at $20B net income for years.

AMZN went from $10B to $20B to likely $26B in the same years.

AAPL went from $55B to $95B.

MSFT went from $40B to $61B to $68B.

Alphabet from $30B to $40B to $70B.

FB from $22B to $30B to $40B.

Nvidia went from $4B to $8B and Qualcomm from $5B to $10B. AMD from $0.3B to $4B.

Does not look good when companies above and below you are greatly able to increase earnings and you are sitting still.

The worry is that they aren't competitive and the 'big money' is due to inertia which is slowing down.

"Value Trap"

Intel is heavily investing now, meaning less profits in the coming years. That may put off a lot of existing investors.

Yeah I don’t see a break out for the stock anytime soon. I, too, just on existing company fundamentals bought a large (for me) amount of shares. I should have bought some of their debt instead because they continue to print money it’s just they’re still behind in many areas so I don’t see the stock multiple changing anytime soon.

> AMD and NVidia are biting away at Intel's data center share

AMD might be but has NVIDIA even entered the CPU market yet?

nvidia is enabling the datacenter market to use data parallelism via hw/sw codesign investments - chips+libs for AI, ETL, SQL, network processing, etc. Those were historically too hard for most devs and hw too edge-case-y (ex: wall st was trying ~15 years ago) so were considered largely CPU-only. With new toolchains, pretty easy, so already the default in AI, and that's been extending deeper into data pipelines.

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