Hey this is tom and as a kid i used to really get excited about a new computer and when the new 486 processors came out - and i got my new computer - i was ecstatic, and that goes to show you how old i am, but i mean back In the day when i was a kid intel was the i mean they held the market down, they were pretty much monopoly like if you got an amd computer for christmas. I mean you feel, like your parents, don't love you, but a lot of water went out of that bridge and things have changed. I think the point of failure for intel came in 2015. 2015 was probably one of the dumbest decisions intel has ever made, which is basically refusing to work with apple and missing out on the entire cell phone industry or smartphone or mobile phone.

Whatever you want to call it an unfortunate decision, only rivaled by apple's decision not to buy tesla and maybe by xerox decision not to get into personal computers, but definitely one of the worst hall of fame bad decisions of management of all time. Luckily, that management is long gone and now we got a guy in charge named pat gelsinger, and even though he was extremely successful at vmware, an extremely appreciated ceo. They did a lot of good stuff he's no rookie at intel. He spent a lot of his formative years in it he was one of the creators of the 486 chip which just mentioned in the beginning, which is kind of my childhood chip.

So he's an engineer he's an experienced vetted ceo. He knows what he's doing and he's back with a plan, and i actually like his plan a lot check this out now. What pat is doing is nothing short of brilliant. In my opinion, what he's doing is basically doubling down on what failed and that might sound like a stupid idea, but hold on a second, so pat is making lemonade out of these lemons.

Now, what am i talking about so for years and years beyond the unfortunate 2015 epic fail to go into the mobile business? The problem with intel was that they couldn't compete. Certain companies decided to go all in on fabs. Tsmc became a household name, pretty much a monopoly now, on the other hand, nvidia apple and pretty much everybody amd, they went fabulous and got rewarded for it. Everybody specializes in what they do best intel were pretty much the only company who are making their own chips by themselves, trying to do both.

That was an epic fail, because when you compete with people who specialize in a certain thing, you can never be as good. That was a dumb decision, however, that dumb decision is now being rewarded, because what happened with covid, we have this massive chip shortage and the pandemic actually amplified what was already going on people going to work remotely people going to e-commerce, more digitization cyber security, pretty much Cars going the way they're going with the evs, so the demand for chips, ain't going nowhere and this bottleneck is probably not going to be solved in next three to five years now. The problem is that most of these fabulous companies like the apples, nvidias and the amd's are fabulous, so they're dependent on tsmc much like everybody else. So there's this huge bottleneck at tsmc and they are trying to fix it.

But they're really not a lot of chip manufacturers out there to solve this problem, and that is exactly the place where the horrible decisions of past management of intel actually can become lemonade, which is exactly what pat decided to do and absolutely love it. And what intel is doing right now and they have that privilege because they already have a fab and they have the expertise and the know-how and the ability to do it. They're building three new facilities in the u.s two brand new in arizona one expansion in oregon and multiple locations in europe, including italy, ireland and whatnot, so they're, basically expanding trying to compete with tsmc for dominance, and i believe, they're going to take a huge chunk of Tsmc business just for the sheer fact that tsmc can't meet demand. The demand is just too big.

We need another player, especially a player. That's going to focus on u.s based facilities, which means grants which means tax deductions, which means tax benefits. They already got it through. This new act that the fab act that just came out so a lot of benefits from the us government pushing this investments grants tax deductions, it's going to be massive, so they're going to get a head start ahead of everybody else, because nobody else can solve this Chip problem, so that's play number one.

I absolutely loved it, but that's not the whole thing check it out. So, basically, up until now, intel had all this capacity to manufacture, but they would only manufacture their stuff now. What pat is doing is actually breaking this deadlock. He's basically saying we're going to expand capacity, we're going to rival tsmc and we're going to design and manufacture chips for all you all and they're going to do it with the backing of the us government, which is going to create a u.s competition and the u.s Counterpart to the dependence of, what's going on over there in china, which ain't good and despite what i just told you, nobody is pricing this into the valuation of intel based on this current stock price i'll share in a second in my dcf, everybody ignores this part.

Everybody's pricing intel based on their chip business, that's actually doing even better pat just led a process that gave birth to the other lake chip they're, also trying to rival tsmc in the production market. So there's going to be a two-headed monster and i think intel at 50 dollars is just a joke. I'll show you in a second right now, because, based on what i'm about to show right now, my dcf will prove that intel just staying in business, not growing at all, just staying as is even ignoring the fab business is worth about two times than what it's Trading right now, right now, it's trading on the assumption it's going bankrupt within three to four years and here's the intel page from seeking alpha, as you can see right here, it's a 206 billion market cap for a company, that's generating 77 billion per year in revenue. That's kind of laughable, as you can see here, the short interest is under two percent, obviously nobody's gon na short intel at this price.

Fifty dollars fifty three cents which probably as low as you can get them in the past six months. Now the problem with this company, as i mentioned before, is the assumption of failure and looking at the share price behavior for the past year, it's pretty horrible. I mean it's down 13 on nine months: nine percent of six months, six percent the past three months, while the s p soared. So this is actually a double down on how sucky they are.

But wait you see well, this company ain't going nowhere, look how much they're failing look half a percent growth, my god negative six percent year over year, ebitda! Well, this company is failing! Well, that's true! They had an epic fail, but you have to give pat the time to execute his plan, because i think the plan is impeccable. There's more, i want to show something else check this out: gross profit margins, amazing, really good net income margin, 27 56 gross margin. For somebody who makes chips, it's really impressive and if you look at the multiples, you'll see the opportunity. 9.8 p gap.

68 undervalued, look at this ev sales, 2.7 42 under valued. If you eb, that's six 67 68 under value look price to sales. 2.6. 40.

Forty percent undervalued, so there's no doubt that this company is trading at insanely low multiples, especially given the fact that they have a 2.75 dividend yield which should be taken into account as well. Looking at the revenues, they don't seem to be going out of business. Look the last five years: they went 59, 62, 70. 71.

72. Sorry, 77, 10, 78. So pretty much they're not growing as much for the past year, but i mean it seems like they're not going out of business. I don't know who came up with this going out of business nonsense and looking at the balance sheet, it's pretty healthy.

Look. They have 34 and a half billion in cash they're about 40 billion in debt, which means they're a little bit negative on the debt side. But look at their assets: they have 167 billion. Why 68 billion in assets? Even if you reduce the 26 billion goodwill you're pretty much at 130 billion, which is way bigger than the 78 billion of liabilities they have.

So they got plenty of assets very healthy situation. I do want to show you what basically tip ranks are saying about it and if you want to sign up for tip pranks, the link is going to be below a 10 discount. If you sign up through my link and on the aggregate you see, people are buying this narrative 6.5 upside. But if you look at quinn, bolton the guy right here, which is the number one analyst on seeking alpha literally number one out of 7728.

This is the og. This is the obi-wan kenobi of tip ranks. He has him as 60 bucks 18 upside now. I think it's much higher than this, but even this guy thinks there's a 18 upside in the stock and he's part of the wall street.

Now this is my dcf 75 dollars for the perpetual approach added four dollars for the ebitda approach. Thinking with a 50.5 stock price, we have about 77 upside now. Obviously, there's risks and obviously nothing is guaranteed. It's just my opinion might be inaccurate, might be wrong, might be ram, isn't a madman, not a financial advisor.

You got to do any research. Obviously, nothing is guaranteed in this world, but i think intel have a good chance of taking a shot at the big boys and i think they're going to make it that's. Why i'm going to be big on this company and i'm going to put a lot of money based on the next three to four years now? Obviously, some of you may watch this video and say well. Tom intel isn't doing great in the month in three months.

I want to explain for me this is a three to five year play. I'm looking at pat's plan he's been saying that by 2025 they're gon na overtake tsmc as the main foundry. So that's what i'm betting on so talk to me. 2025.

Anything in between is just waiting game so for all your swing, traders and day traders, this video ain't for you, but for all my patrons and channel members huge shout out to you all. Thank you so much for making this possible five dollars per month. You can join and support the channel. The link is below in the description.

Thank you. So much see.