Jin Rong Jie·2025-08-20 00:48Core Viewpoint - Intel's stock has rebounded significantly, but its valuation has reached levels not seen since the dot-com bubble, raising concerns among investors [1][2]. Group 1: Stock Performance and Valuation - Intel's stock price has increased by 28% this month, adding approximately $24 billion to its market capitalization [1]. - The price-to-earnings (P/E) ratio for Intel has reached 53 times its expected earnings for the next 12 months, the highest since early 2002 [1][2]. - Analysts express concerns that the current valuation is excessively high, suggesting it reflects a bet on government support for Intel [1]. Group 2: Government Involvement - The U.S. government is considering acquiring a 10% stake in Intel, potentially converting previously allocated funds under the CHIPS and Science Act into non-voting equity [2]. - While government involvement may provide short-term benefits, there are concerns about the long-term implications and potential difficulties in exiting such arrangements [2]. Group 3: Financial Performance - Intel is projected to achieve over $1 billion in adjusted profits over the next four quarters, a stark contrast to the $1.3 billion loss in the previous four quarters [3]. - The company's average annual profit from 2018 to 2021 exceeded $20 billion, highlighting a significant decline in profitability [3]. Group 4: Leadership and Strategy - CEO Lip-Bu Tan is focusing on cost-cutting measures to improve profitability, but this raises concerns about Intel's competitive position in technology leadership [5]. - The ongoing expansion of the foundry business, initiated by former CEO Pat Gelsinger, is a costly strategic move that may impact Intel's financial health [5].