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Speaker 2: Focusing once again on earnings and Intel certainly on that
Speaker 2: list as we see it popping around in the aftermarket.
Speaker 2: What does that mean. We've got Intel shares down about
Speaker 2: three point eight percent as we speak, and some of
Speaker 2: it has to do with a week forecast supply shortages
Speaker 2: hampering sales. This is not a new story that we've
Speaker 2: heard around the chip companies, particularly when it comes to AI.
Speaker 2: The demand is there, they can't meet the demand, which
Speaker 2: is kind of a good positive story that the demand
Speaker 2: is still there, but it's not great when you can't
Speaker 2: meet that and you're just you know, trying to kind
Speaker 2: of connect the dots.
Speaker 1: Yeah, I want to bring an Ivan Fine Seth, research
Speaker 1: director and chief investment officer at Tiger's Financial Partners. The
Speaker 1: firm has more than five hundred million dollars under management
Speaker 1: and as a buy rating on the company's stock. Ivan
Speaker 1: does just very like your immediate knee jerk reaction to this,
Speaker 1: does your rating? Well, I know you can't answer that question,
Speaker 1: but your knee jerk reaction. I'm not even to ask
Speaker 1: your knee jerk reaction to the numbers here. You're shaking
Speaker 1: your head.
Speaker 3: It's not this quarter. It's not a quarterly story. It
Speaker 3: is a major shift in the company. It's and they
Speaker 3: have I think turned a major corner. But the stock
Speaker 3: is also run up significantly from a lower twenty. It
Speaker 3: hit fifty five dollars, so I think it may have
Speaker 3: gotten a little bit ahead of itself and it may
Speaker 3: pull back. But I think everything that's going on, and
Speaker 3: then the new CEO, lip Pretend is is as planned.
Speaker 3: I mean, they are well positioned to benefit from AI
Speaker 3: data center demand, AI computer demand, their partnership with Intel,
Speaker 3: money from the US government, so they are plenty flush
Speaker 3: to invest in all of their key growth initiatives.
Speaker 2: So fundamentally, what's changed Ivan when it comes to this company?
Speaker 2: You obviously sound really upbeat. Is it just a case
Speaker 2: of having the backdrop because you know of the United
Speaker 2: States government? Is that what's done?
Speaker 1: It?
Speaker 2: You know kind of.
Speaker 4: It's everything, Okay.
Speaker 3: It's the It's first of all, it's the it's President
Speaker 3: Trump's push on what's sold here is made here, investing
Speaker 3: in US semiconductor manufacturing capacity here, expanding the Intel foundry business,
Speaker 3: as well as the growth of data centers, the growth
Speaker 3: of AI enabled PCs. So they are positioned, i think,
Speaker 3: perfectly to benefit from what what was in the early
Speaker 3: innings of we're going to be a long game of
Speaker 3: the AI driven growth in both the tech sector and
Speaker 3: the US and the global economy.
Speaker 1: So okay, I just want to this is a different
Speaker 1: company than it was six months ago as a result
Speaker 1: of as a result of the US investment. And I'm
Speaker 1: wondering what that position, what that type of what that
Speaker 1: investment does for LIP. Butan's position like you know, when
Speaker 1: you're the CEO of a company and you come out
Speaker 1: with a report, you're you're obviously you got to worry
Speaker 1: about the board, You got to worry about shareholders. Now
Speaker 1: he's got to worry about a phone call from President
Speaker 1: Trump because the President likes to talk about how well
Speaker 1: the stock has done since the US made that investment.
Speaker 1: What does that change the dynamic?
Speaker 4: It doesn't.
Speaker 3: But it's really funny that President Trump wanted to go
Speaker 3: from deporting.
Speaker 4: The guy to giving the guy money.
Speaker 1: Hey, that's the power of a conversation, right, But.
Speaker 2: It also shows, but it also shows how quickly things
Speaker 2: can change, certainly from the White House perspective.
Speaker 3: Well, it highlights Trump's perspective on driving the US manufacturing infrastructure,
Speaker 3: US leadership in all key areas, and semiconductors is a
Speaker 3: very important area, especially that Intel makes semiconductors for the
Speaker 3: defense industry.
Speaker 1: Interesting. Okay, so does it make the defense business stronger?
Speaker 4: Absolutely?
Speaker 3: Hey, there's no better partner, one number one partner. I
Speaker 3: don't Well, it could be a tie US government and Nvidia.
Speaker 4: Okay, so let me go to the partners.
Speaker 1: Yeah, let me let me ask this question a different
Speaker 1: way than Ivan. And that's about where Intel would be
Speaker 1: right now. If the US government had not made that investment,
Speaker 1: would this be a completely different picture? Would it have
Speaker 1: been a completely different quarter?
Speaker 4: Well, yeah, I think this has helped.
Speaker 3: I think this removes concerns, balanceet concerns that moved and
Speaker 3: allows the company and the CEO to focus on business.
Speaker 3: A partnership with Nvidia is great, and partnership with the
Speaker 3: USK it opens up. They're back working with Apple, They're
Speaker 3: going to be working with everybody, and I think you're
Speaker 3: going to see Intel as a major contender as a
Speaker 3: sub reconductor foundry semiconductor manufacturer to take on Taiwan Semiconductor.
Speaker 2: So okay, going back to Intel, under pressure in the aftermarket.
Speaker 2: We continue to track the share price I think down
Speaker 2: about four or five percent as we speak. The forecast
Speaker 2: for the first quarter top and bottom line disappointing. At
Speaker 2: the same time, it's talking about the CEO saying demand
Speaker 2: is quite strong, says the chip maker missed a lot
Speaker 2: of opportunities, says production yields not up to his standards,
Speaker 2: and then he goes on to say making our Intel
Speaker 2: says the company making good progress in fourteen A production
Speaker 2: on track for volume production in twenty twenty eight, has
Speaker 2: multiple engineering engagements on fourteen A. Help me understand what
Speaker 2: that means.
Speaker 3: These are different chips, the fourteen A, the eighteen A
Speaker 3: that they and the announcements that they made earlier this
Speaker 3: month at the SEA. They got their latest semiconductors on
Speaker 3: track to go into production to meet huge demand. Demand
Speaker 3: for all semiconductors is outstripping supply. There's in fact, concerns
Speaker 3: of memory shortage and process or shortage. So they got
Speaker 3: the demand wind is that is a tailwind, and they
Speaker 3: are back to innovating and developing and work, you know,
Speaker 3: winning customers and working with key you know computer manufacturers,
Speaker 3: Key Hyperscaler, you know, cloud service providers. And I think
Speaker 3: that they got a tremendous tailwind.
Speaker 4: The stock ringing up a lot. It went from twenty
Speaker 4: to fifty five.
Speaker 3: Even though if it pulls back to forty five, you know,
Speaker 3: it's a buying opportunity because I think that long term
Speaker 3: they are going to be back. I mean I don't
Speaker 3: think even be back to their former glory. I think
Speaker 3: they are going to be one of the world's leading
Speaker 3: semiconductor developers, designers, and manufactor.
Speaker 2: So the foundry Services division their factory unit revenue of
Speaker 2: about four and a half billion. It was a gain
Speaker 2: of about three point eight percent I've bean from the
Speaker 2: year before. It currently relies on almost exclusively as you know,
Speaker 2: Intel product divisions for orders. It's looking to expand beyond that.
Speaker 2: Is that crucial for the company's future growth.
Speaker 3: It's crucial, But that is the opportunity, okay, to work
Speaker 3: with everybody, because you got to realize that most of
Speaker 3: the other semiconductor companies, even in Nvidia, Apple, all of
Speaker 3: the companies like Google, Facebook, Amazon, that want their own
Speaker 3: processors Qualcom. They're all virtual manufacturer. They don't actually manufacture.
Speaker 3: They outsourced to companies like tod Wan semi Coonductor and
Speaker 3: hopefully companies like Intel to manufacture their processors.
Speaker 1: You know, is the US the US is at least
Speaker 1: from an investment protective things have kind of quieted down
Speaker 1: a little bit since the summer. But are there any
Speaker 1: other companies, particularly companies within your universe that you follow,
Speaker 1: that could see in your view and investment by the
Speaker 1: US government.
Speaker 3: You know that I don't know. The other companies that
Speaker 3: I like in the semi conductor sector are in Vidia
Speaker 3: and Quailcom. And you know, in Vidia is pretty flush.
Speaker 4: Yeah they need so.
Speaker 1: Okay, they could they could make an investment in the
Speaker 1: US government.
Speaker 3: Yes, I really think it was great how it turned
Speaker 3: around after the meeting with Trump and Tan that Trump
Speaker 3: wrote a check and and also we have a lot
Speaker 3: of government incentives to build UH semiconductor manufacturing capacity here.
Speaker 4: Yeah, we have projects.
Speaker 3: In Arizona, projects in Ohio. So ideally the US could
Speaker 3: be the semiconductor manufacturing capital for the world.
Speaker 2: So in terms of going back to a new right,
Speaker 2: hoefully so I even point out the run up that
Speaker 2: we've seen in Ivan shairs and Intel shares. You know,
Speaker 2: the information put out a story and it says Intel's
Speaker 2: forward even a multiple has lifted to twenty times highest
Speaker 2: level since twenty twenty one, well above the twelve and
Speaker 2: a half times at which TSMC currently trades. This is
Speaker 2: what I was trying to get to before with our simulcast.
Speaker 2: I was talking to market caps, but it has to
Speaker 2: do with valuation. Intel now pricier than TSMC. Does that
Speaker 2: make sense?
Speaker 3: Well, I always say I wish we could solve the
Speaker 3: mysteries of the stock market by dividing two numbers like
Speaker 3: cash flow or even pe. Stocks go up for everything
Speaker 3: that you really can't measure. And this is about Intel's future.
Speaker 3: So we are going to see if all goes well,
Speaker 3: a huge ramp up in revenue, in expansion in margin
Speaker 3: and increasing cash flow and then in increasing profitability. So
Speaker 3: I think their foundry business will ramp up significantly, and
Speaker 3: as their new processors come to marke get revenue and
Speaker 3: cash flow and profitability will ramp up also ramp up significantly.
Speaker 2: Yeah, Lip Bhutan saying, you know, Intel face is an
Speaker 2: execution challenge. We are laser focused as a team to
Speaker 2: improve that to be candid. It's just our execution that
Speaker 2: needs to improve. Ivan fine Seth, great stuff, as always
Speaker 2: so appreciated. He's, of course, chief Investment Officer over at
Speaker 2: Tiger's Financial Partners, joining us on Intel