Ed Snyder, Charter Equity Research, believes that Intel Corp. (NASDAQ: INTC), is looking to the US Government as its savior. This has been a major obstacle in the way of their meaningful recovery.
Intel will not receive any help from the government, as it can only provide cash. The company needs a new strategy, and to change its culture.
Snyder’s comments come a day following Intel’s announcement of market-beating financial results for its 4th quarter, but with disappointing future guidance.
Intel’s stock price is down by more than 55% from its 52-week peak.
Why doesn’t the federal government fund Intel?
Intel has received a grant of $7.86billion from the US Government to help it build new factories during Q4.
Snyder, in a recent interview with CNBC, questioned whether federal funding was reliable and what that could mean to the company’s future.
He added, “We could make a show of all the failures that the government invested in but never got off the ground.”
Intel tick does pay dividends to make it appear more appealing to income investors.
Intel is still a laggard when it comes to AI
Intel’s failure to participate in the Data Centre space is another major issue.
Ed Snyder says that Intel provides CPUs for data centers, but it is less active when it comes to “AI clusters, power supplies, and networking”, where there is the most action.
A Chinese startup, DeepSeek, recently released a low-cost but incredibly powerful AI model, which suggests that the high-end AI chips may not be needed at all.
Intel has been criticised for producing less powerful GPUs than Nvidia.
DeepSeek AI Model and INTC
Intel’s announcement of DeepSeek does not mean that it is out of trouble.
Falcon Shores is not being released due to issues with performance and competition.
The Nasdaq-listed firm has instead committed itself to creating a system level solution, called Jaguar Shores.
Intel needs to tackle its strategy and performance challenges to compete effectively in the AI industry.
Intel announced a break-even profit of up to $12,7 billion for the first quarter.
Comparatively, analysts were at $9 cents per share with $12.87 Billion in revenues.
In January there was news that Intel had been approached by a brand new company.
As new information becomes available, this post may change.
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