Down 45%, Should You Buy the Dip on Intel?

Core Viewpoint - Intel is facing significant challenges in the semiconductor market, particularly in AI infrastructure and foundry operations, leading to a 45% decline in stock value over the past year [1] Group 1: Leadership and Turnaround Efforts - Intel appointed Lip-Bu Tan as the new CEO, who has a background in electronic design automation and previously served on Intel's board [1][2] - Tan's plans focus on revitalizing AI chip efforts, improving the foundry business, and streamlining operations, which are expected to be challenging [2] Group 2: Market Position and Competition - Intel's market share in the GPU space is nearly zero, lagging behind Nvidia and AMD, with failed attempts to compete in the GPU market [3][5] - The company has shifted focus to the Jaguar Shores GPU, designed for AI inference and high-performance computing, as part of a broader system [4] Group 3: Foundry Business Challenges - Intel's foundry business is under pressure, with a 7% revenue decline in 2024 and a $13.4 billion loss, raising concerns about its viability [8] - The company is required to maintain a majority stake in its foundry business to comply with CHIPS Act funding conditions [7] Group 4: Financial Position and Asset Management - Intel has invested nearly$50 billion in capital expenditures over the past two years, indicating significant physical asset value [10] - The company is selling a 51% stake in Altera for $4.46 billion, valuing the company at$8.75 billion, which is less than the original purchase price [11] - Intel's stock is trading at a price-to-tangible book value ratio of 1.2, suggesting it is undervalued relative to its physical assets [12]