Intel Outside? Can the ageing chip maker break up and get back inside?

Welcome to AI Collision 💥,

In today’s collision between AI and our world:

Intel Inside…everywhere
Competition risk on full display
Split it up, sell it off

If that’s enough to get the CPUs rolling out of the foundry, read on…

AI Collision 💥

Remember this?

I do. I’ll never forget it. I wonder if my kids will look at the Nvidia RTX or Nvidia GB200 in the future the same way I look at Intel’s Pentium today.

The Pentium processor was Intel’s flagship processor in the 90s and 2000s. The idea of having “Intel Inside” within your PC meant that you had yourself a very capable computer. It enabled you to do everything from “surfing the web” to gaming and, of course, it improved office productivity.

And then the Intel Inside stickers started to lose their adhesive, peeling off the now yellowing cases of the computers that had Intel Inside.

Intel (INTC), of course, never really went away.

The company was always the gold standard of central processing units (CPUs) and its business thrived as the PC revolution really took off and grew to become a gigantic part of our lives.

The reason Intel’s chips became so in demand was because of its x86 architecture. It was great for multitasking as it prioritised performance and speed over performance with efficiency and low power demand.

In other words, Intel was great for computers… not so great for smaller devices like smartphones.

Thereby as the smartphone revolution kicked into gear, names like Qualcomm began to rise in strength and size as their chips – based on Arm designs – became the go-to processor for smartphones. The reason? Arm-based chips prioritised efficiency and low power consumption without massive performance cost over the out and out grunt that Intel could muster.

So Intel never really became a dominant player in the smartphone world. But it did have PCs and laptops, and those were ever increasingly demanding more and more power.

But arguably, Intel fell asleep behind the wheel. It neglected the smartphone market and failed to recognise the speed of companies like AMD and Nvidia. They were developing more powerful and in-demand graphics processing units) (GPUs) that evolved into the AI chips that we now see come from these (now much bigger) tech hardware giants.

Suddenly AMD started producing CPUs that were not just competing with the best of Intel but surpassing them. This head-to-head in the last five years or so has really tilted in favour of AMD. As for Nvidia? Well Intel couldn’t really compete with Nvidia as GPUs were never a major focus for the company, albeit it should have been.

A lost opportunity in smartphones, a lost opportunity to stay at the front of PCs and laptops, a lost opportunity to refocus in on the future and make a direct play at the AI revolution.

Intel is a prime example of a company at the top of its game falling victim to outright competition risk.

As the market sold off and out of tech in 2021, it seemed as though there was no real path forward for Intel. And the market saw it too.

From the mid 2000s (when AI was still a distant vision) as PCs were getting more powerful and advanced and in demand for Intel products, the company thrived. The stock price went from the depths of 2008 at around $12 to a high of $70 by 2021.

483% in 12 years is decent for such a mega-cap staple of the US tech market. But from 2021 the company has now shed almost 70% of its value as it’s been swamped by competition and failed to stay relevant.

The only shining light seemingly left for the company has been its foundry business.

Intel seems to have realised it just can’t compete in chip designs anymore. So in 2024 it decided to put more emphasis into its chip making business, foundry. Spinning that into a wholly owned subsidiary has meant it can operate more independently and leaner than before.

Much in the same way that HP split itself out, Intel has split itself out too. With a renewed approach to US tech being made on US soil, that’s given Intel a glimmer of hope to stay relevant.

But even then, the vultures have been circling. Despite a renewed focus on foundry, it is still having to compete with the like of chip-making juggernaut Taiwan Semiconductor Manufacturing Company (TSM) whois investing more into US-based chip-making facilities and looking to gobble up Intel’s entire business while it’s at it.

That’s where the most recent rumours have been circulating that Intel’s real value might be in splitting up and selling off the entire company.

Just the other week when these rumours hit, the stock price jumped 15% in a day. The kind of action unseen in Intel for half a decade.

Maybe Intel gets bought out, taken over and a long-standing pillar of US tech is absorbed into Taiwan’s biggest and greatest export.

Or maybe Intel can battle it out alone, have Intel Foundry operate separate, even maybe have it listed independently. If that’s the outcome, I would expect it to take some time before it gathers momentum again.

So right now, of all the “old timers” we’ve looked at this week, if you were to pick one that’s not going to exist in another two years’ time, it’s likely Intel sits at the top of that list.

DeepSeek just shook AI – but it’s a setup for the next big move

Wall Street panicked when DeepSeek launched, with AI stocks taking a hit. But here’s what most investors don’t see: this is an efficiency breakthrough, not a threat. AI adoption is accelerating – and the companies at the forefront of this revolution are about to get stronger. The best part? The stocks I’ve been tracking are now at a discount, creating a rare window to invest before the next potential leg up.

Click here to learn how you could position yourself before the market rebounds.

Capital at risk.

Busters & Busters 💰

***Still nothing booming (yet) for the rolling week. It’s been a brutal week. So, we’re still just Busters & Busters today***

AI and AI-related stocks moving and shaking up the markets this week. (All performance data below over the rolling week).

man in black suit jacket and black pants figurine

Bust 📉

Western Digital (NASDAQ:WDC) down 7%
Micron (NASDAQ:MU) down 6%
AMD (NASDAQ:AMD) down 8%

Bust 📉

Arm Holdings (NASDAQ:ARM) down 10%
C3.ai (NYSE:AI) down 14%
Tesla (NASDAQ:TSLA) down 19%

From the hive mind 🧠

Remember the government’s big $500 billion Stargate project? Well, that’s still going. But if you want some idea of the might and clout of Apple, then take a look at the $500 billion it just promised to invest in the US over the next four years. I think Apple just Top Trumped the US government.
There’s been a hefty sell-off in tech over the last few days. Specifically, a big sell-off in AI stocks. The reason? The belief that the hype is greater than the reality and one report that suggests Microsoft is winding back its AI investment – which, of course, the market has taken as the end of the AI boom.
Microsoft reports, Trump’s aggressive stance towards China, Nvidia results – the reasons to sell up and move out the market are stacking up. But should you? No. And I’ll dive into why next week. But remember the saying, the best time to buy is… when there’s blood on the streets.