3 reasons why Intel is a registration goal

Intel (Intc -1.13%))) The shares rose by more than 9% on January 17th according to the online news page Semicccurate reported that a mystery buyer was interested in the purchase of the company. So that the disturbed chip maker, who once dominated the semiconductor industry, was put into the spotlight.

Intel’s suffering has reduced the inventory of multi -year deep stalls, and some signs indicate the exaggerated pessimism, which probably makes it a business objective. The potential buyer can have one point for three reasons.

1. The assessment of the share

In this case, the evaluation does not refer to the P/E ratio, which is more than 100 thanks to falling income. Instead, the evaluation problems revolve around the book value of the share, in particular the price-book ratio.

The book value is the value of a company’s share capital. In other words, it represents the remaining value of a company when it sells its assets and has paid all of its liabilities. Even after the recent increase in the share price, the book value of Intel is a little more than 0.9, which means that the company can theoretically only increase the value by 8% by liquidating.

However, this is probably also a significant undervaluation for a company like Intel. In comparison to the average S&P 500 Shares are sold more than five times the book value. Therefore, it is no wonder that bargain hunters have put this stock in the eye.

2. Intel Foundry business

Despite its problems, no company operates any more foundations on US floor than Intel. Despite this advantage, the proportion of global chip production in the United States fell from around 40% in 1990 to only 12% in 2020.

This has alerted politicians on both sides of the aisle. For this purpose, the Biden administration passed the Chips Act and provided 53 billion US dollars for domestic chip production.

Although foreign companies such as Samsung and Taiwan Semiconductor Manufacturing Company I put on part of this money, Intel’s foundry presence and earlier promises to invest tens of billion dollars in state-of-the-art foundries, after all, one of the world’s top chip producers could make it. An eventual Intel resuscitation is therefore a clear possibility.

3. The current semiconductor market

Admittedly, many investors wrote off Intel after it has fallen behind competitors AMD And Nvidia technically. The sudden increase in AI accelerators probably did the goals of the former Intel CEO Pat Gelsinger to fail, who had hoped to make Intel again the technical guide until this year.

As a rule, however, investors focus almost exclusively on the leading edge of the semiconductor market and forget that the demand for less technical chips is still enormous.

For this purpose, Intel achieved a product revenue of almost 36 billion US dollars in the first nine months of 2024. Even if Intel excludes the income of $ 13 billion, Intel remains an important force in its industry.

In addition, investors should remember that companies like Globalfoundries In the USA and United Microelectronics In Taiwan, large captual companies operate with older chip designs. In the case of TSMC, 26% of its sales came from chips in the fourth quarter of 2024, which are more than 7 nanometers over 7 nanometers. Although this segment probably does not drive the Premium share evaluations, it remains an essential source of income for the semiconductor industry.

Intel as a business goal

In view of the condition of Intel, it is easy to see why a larger buyer has shown interest. It is unlikely that the company will become the industry leader again, and its stock will probably not exceed the best industry names.

Nevertheless, a book value below 1 point is on a considerable undervaluation. In addition, industry and political forces could make it a top foundry in time, and its chip business continues to generate significant income despite the technical restoration.

Time will show whether an external unit is bought in Intel. In view of the current state, the investment in semiconductor shares could benefit from investors.