Intel: The Turnaround Faces Massive Challenges

Summary:

  • My previous Sell rating for Intel has been spot on as Wall Street punishes the stock due to lack of a clear roadmap toward growth.
  • Intel has announced several changes including layoffs, dividend cuts, and capex reduction which might have a positive impact in the near term.
  • However, one of the biggest drawbacks for Intel has been the wrong long term strategy of trying to beat TSM with massive capex in high-cost regions.
  • The negative FCF for Intel is unlikely to change in the near term and Wall Street could overlook the progress made by the company in AI chips.
  • Intel is trading at a very low price but it will be quite a while before the management is able to turn the ship around.

Entrance of The Intel Museum in Silicon Valley.

JHVEPhoto/iStock Editorial via Getty Images

Intel (NASDAQ:INTC) stock has not recovered from the shock of the recent earnings where it missed in both revenue and EPS estimates. In my previous article, I mentioned that Intel is a


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