Intel Gains Favor With Redditors Over Nvidia, AMD As 'High Uncertainty, Low Risk' Stock Play

Author: Surbhi Jain | May 01, 2024 03:43pm

Intel Corp (NASDAQ:INTC), a tech giant often overshadowed by competitors, is sparking discussions among Reddit’s ValueInvesting community.

Despite recent setbacks, including declining revenue and earnings, investors are intrigued by Intel’s potential for a turnaround and long-term growth.

One Redditor highlighted Intel’s favorable market cap compared to key competitors like Advanced Micro Devices Inc (NASDAQ:AMD), Nvidia Corp (NASDAQ:NVDA), Taiwan Semiconductor Manufacturing Co Ltd (NYSE:TSM), and Samsung.

Also Read: Intel’s Inventory Issues: Redditors Highlight How Overstock ‘Killed Their Margins,’ Yet Analysts See Upside

Redditors See Intel As Undervalued

With a market cap of approximately $130 billion, Intel is seen as undervalued, especially when considering its potential upside. If Intel can execute its plans under CEO Pat Gelsinger and become the second-largest chip manufacturer behind TSMC, there could be significant upside for investors.

The current price presents a reasonable expectation of preserving investment with a solid chance of substantial returns if Intel’s plans materialize.

“In my opinion, this is a good play. It’s a Monish Pabrai “High uncertainty, low risk” type play.”

One Redditor commented

“Sum of parts valuation for INTC is 50+ People forget the foundry business and focus only on chip design.”

Another Redditor commented

Intel’s Investments Into Cutting-Edge Technologies

Another key point of discussion was Intel’s increased focus on research and development (R&D).

Intel’s role in developing technologies used by competitors like TSMC and AMD is noteworthy. The company has the first EUV scanner and is working on processes that could take chip technology below 1nm.

This indicates Intel has the potential to lead the industry in the coming years. Despite past missteps, Intel is investing heavily in cutting-edge technologies like High NA EUV and backside power delivery. These innovations could position Intel as a leader in the chip industry once again.

“Intel will be the first to rollout High NA EUV. Theyre going to be the first to do backside power delivery.”

–said one Redditor

“Intel has the first EUV scanner and are developing the processes that will take us sub 1nm. They are the easiest play if you want to get rich over the next 15 years.”

–said another Redditor

Intel Stock’s Current Low Valuation May Be Unwarranted

While some investors remain cautious, citing Intel’s history of failed turnarounds, others see the current price as a buying opportunity. Intel’s fundamentals and turnaround plan remain unchanged, suggesting that the stock’s current low valuation may be unwarranted.

Intel’s stock is a compelling opportunity for investors seeking long-term growth. While risks remain, including the company’s track record and the broader market environment, many Reddit investors see Intel as a high-potential, low-risk investment.

Read Next: Intel ‘Still A Work In Progress’ As ‘Turnaround Efforts Take Root,’ Analysts Say After Q1 Disappointment

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