作者: sec2100 時間: 2021-10-3 10:25
Today, the market is a sea of red as the major indexes are significantly lower on the 1-day chart. I have a group stock chat with several of my friends, and one of the members, who is a CPA, said that he likes NVIDIA Corporation (NVDA). I asked him why he likes NVDA, and he replied that it's a solid company with more room to grow. I don't disagree with this logic as NVDA has positioned itself to be one of this decade's most dominant chip companies. NVDA has been a phenomenal investment generating a 1,202.07% return in the last five years, 68.25% in the past year, and 65.91% in 2021. Any investor would be crazy if they didn't want those returns in their portfolio. I started doing some research, and to my surprise, I found another chip company that I like more than NVDA in today's market, and it's good old Intel Corp (INTC).作者: sec2100 時間: 2021-10-3 10:27
Fundamentals haven't mattered in this market for quite some time. I have continuously stated in the group stock chat that I am in, at some point, the high-flying popular stocks will get their wings clipped because people will realize they are tremendously overpaying for future growth. I am all for investing a portion of your capital in growth companies, and I am invested in several, including Palantir (PLTR), which I frequently write about. Would I classify NVDA as a great company? Yes, I would. After looking at the numbers of others in their sector, INTC is much more enticing to me. I can foresee many comments disagreeing with my logic, but the beautiful thing is that numbers are finite and tell a story based on opinions. I am happy to have a discussion with anyone in the comment section about INTC and NVDA.作者: sec2100 時間: 2021-10-3 10:30
While reading through my comparison, please keep in mind that NVDA has a market cap that is slightly more than double INTC's. In the TTM, INTC has generated $77.62 billion of revenue compared to the $21.9 billion NVDA has generated. Overall, INTC has generated 354.55% more revenue than NVDA. Everyone on team NVDA would say you're paying for growth and that I am old and don't get it. Sure, I am 40, but I understand investing, and I understand that sometimes you can overpay for an investment. NVDA is certainly a growth company as its annual revenue has exploded by 154.28% over the last five years as its annual revenue increased by $14.99 billion. INTC, on the other hand, over the same period increased their annual revenue by 29.04%. From a growth perspective, NVDA's revenue growth from a percentage standpoint completely overshadows INTC's, but I would encourage people to actually look at the numbers. INTC generated an additional $18.23 billion of annual revenue over the same five-year period. Even though NVDA on a percentage base has grown significantly more than INTC, but have they really grown more than INTC? Considering INTC has generated an additional $3.24 billion in revenue compared to NVDA over the past five years, I would say no.作者: sec2100 時間: 2021-10-3 10:33
While INTC generates significantly more revenue, I like looking at the amount of profit a company produces as well. Over the past five years, NVDA has increased its annual net income by $5.41 billion (324.85%). NVDA has done an incredible job of improving from $614 million of net income in 2015 to $7,08 billion of net income in the TTM. Just like the revenue factor NVDA crushed INTC on a percentage level, but INTC actually increased their net income over the same period by a larger amount than NVDA. In 2015 INTC generated $11.42 billion of net income, and in the TTM, INTC has produced $18.56 billion. This is an increase of $8.24 billion or 79.87% to INTC's annual net income. While people would say they are paying for NVDA's growth, what is neglected to be discussed is how INTC has increased its annual net income produced by an additional $2.83 billion over the past five years. Individuals investing in NVDA are paying for huge growth rates based on percentages, but INTC is growing by larger amounts.作者: sec2100 時間: 2021-10-3 10:36
My valuations are based on the TTM figures from the income and cash flow statements, the last quarterly report on the balance sheet, and the current stock price and market cap. Price to Sales is a valuation that compares the stock price to the revenue generated per share. It's an indication of the value placed on each dollar of revenue generated. A lower P/S ratio could indicate that the share price is undervalued. INTC trades at a P/S ratio of 2.85x compared to NVDA's 23.47x. Price to earnings is used to value a company's share price to the earnings it generates and indicates how much an investor is willing to pay per $1 of earnings. A lower P/E ratio could indicate that a company's share price is undervalued. INTC has a current P/E of 11.93 compared to NVDA's 72.64. I review the return on equity to measure each company's profitability in relation to the equity on the books. In this category, NVDA is generating a return on equity ratio of 33.47% compared to INTC's 21.78%.作者: sec2100 時間: 2021-10-3 10:38
The market is placing a huge valuation on NVDA compared to INTC. From total equity to market cap standpoint, INTC has a multiple of 2.58x. INTC has $85.21 billion in total equity on the books, and its market cap is $219.97 billion. NVDA, on the other hand, has $21.15 billion in total equity and a market cap of $551.14 billion. The market is placing a multiple of 26.06x on NVDA's equity. The same theme extends to both company's price to free cash flow. INTC has generated $16.33 billion in FCF in the TTM, placing their price to FCF multiple at 13.47x. NVDA has generated $6.67 billion in FCF in the TTM, and the market has placed its FCF multiple at 82.69x.作者: sec2100 時間: 2021-10-3 10:41
The current valuation for NVDA is broken. You would be paying a P/S ratio of 23.47, a P/E ratio of 72.64, 26.06x equity multiple, and 82.69x on its FCF. NVDA generated $9.67 billion less in FCF, $55.72 billion less in total revenue, and $11.48 billion less in net income over the TTM compared to INTC. INTC has generated an additional $3.24 billion in annual revenue and $2.83 billion in annual net income over the past five years compared to NVDA. On a percentage basis, they are not growing as quickly, but overall, they are growing by larger amounts, yet investors are paying out the nose for NVDA.作者: sec2100 時間: 2021-10-3 10:45
This is a perfect example of how some valuations are not based on fundamentals and don't make any sense. Based on the numbers, should NVDA have a market cap that is more than double INTC's? Whether the investment community wants to acknowledge this, spending too much on an investment and paying too much for growth are real occurrences. I am willing to pay for growth and make an investment with a 5-10 year time horizon, but the numbers, sector, and available information need to make sense. I think NVDA is a great company and will continue to experience considerable growth and improve its metrics as the years go on. Still, today they are incredibly overpriced compared to INTC. Over the past five years, INTC has generated $361.06 billion in revenue and $91.16 billion in net income compared to NVDA's $70.92 billion in revenue and $21.4 billion in net income. At some point, the numbers and fundamentals will matter and cause investors to think twice about what they're paying for. Just because NVDA has a larger growth rate doesn't mean a higher valuation is justified as they have a long way to go before producing the annual revenue, FCF, and net income that INTC does.作者: sec2100 時間: 2021-10-3 10:47
NVDA may be a great company, but I couldn't pay today's valuation for its stock after comparing its numbers to INTC's. Sometimes you need to take the company names out of the equation. On one side, company A has generated $16.33 billion in FCF, paid out $5.58 billion in dividends with a yield of 2.5%. Company A also has a P/E of 11.93, a P/S of 2.85, trades at an FCF multiple of 13.47x, and has increased its annual revenue by $18.23 billion in the past five years. On the other side company, B has generated $6.67 billion in FCF, paid $396 million in dividends for a yield of 0.1%, has a P/E of 72.64, a P/S of 23.47, trades at an FCF multiple of 82.69x, and increased its annual revenue by $14.99 billion over the last five years. It doesn't make sense to pay that type of a valuation for company B, and it's even crazier that company B has a market cap that's more than double company A. Do I wish I invested in NVDA five years ago, sure who wouldn't want a 1200% return in five-years? Does today's valuation make any sense? Absolutely not? Based on today's numbers, I don't see how you justify buying NVDA over INTC at these valuations.作者: sec2100 時間: 2021-10-3 10:49 https://seekingalpha.com/article ... fter-intels-numbers
(以上全文連結)作者: sec2100 時間: 2021-10-3 10:56
Soraemon
Yesterday, 2:34 PM
Comments (1)
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@igli1234 not sure about nvdia beating intc in self driving, mobileye is miles ahead in products and partnerships and is actually launching tangible service soon such as robotaxi in germany, and partnerships with nio and toyota作者: sec2100 時間: 2021-10-3 10:58 https://www.intel.com/content/www/us/en/research/overview.html
intel labs landing page作者: sec2100 時間: 2021-10-3 11:05
The issue is when a traditional analyst tackles tech. They look at EVERYTHING about a company except what matters most.
The KEY element in tech in talent. Your greatest asset walks out of the building every day. Young talent, up on latest technologies is much more valuable than most older people, especially if they have been at a company for over 5 years. Brutal, I realize, but in my 45 years of tech, that is generally true.
That said, where would a newly minted PhD or a 30 something engineer at the peak of their skills want to work, hot NVidia or old, stodgy Intel.
While numbers matter, better to check GlassDoor or any of the list of forums on places to work. When a company in chips or software is considered a 'slave ship' by employees, that means more than the slick PowerPoint investors deck.
Maybe the new CEO can turn around Intel culture and/or match NVidia compensation (pay + options), but there is limited time. 作者: sec2100 時間: 2021-10-3 11:07
"where would a newly minted PhD or a 30 something engineer at the peak of their skills want to work"
This is a key point. NVDA has Selene, the 5th fastest supercomputer on earth, sitting in their data center in Santa Clara. I can't fathom the number of freshly minted AI/ML PhD researchers who want to go to work with that kind of resource in the tool box.
And then the idea NVDA are using Selene to design and build products and platforms has me pondering how ANY chip company keeps up without their own Selene.作者: sec2100 時間: 2021-10-3 11:46
Fabless designers are a dime a dozen these days. Intel is going to start making graphics cards and could take market share at the low and mid range (along with AMD). High end cards are mostly used for crypto but that could change with the Ethereum 2.0 protocol changes or AI ASICs.
I have an Nvidia GTX 2070 which is a 3 year old card and works just fine for 99% of games on an UltraHD monitor.
Nvidia is a great company but a valuation north of half a trillion on relatively meager net income?
What will be interesting is if Nvidia can buy ARM holdings. I'm not bearish I just see the wisdom in owning a cash cow like Intel that is possibly on its way back up with Fab problems getting resolved.作者: sec2100 時間: 2021-10-3 12:04
I will add to my NVDA position under $200. Probably around $180-$185.
Been buying Intel weekly for last 16 months.
New products coming (have to be on time as scheduled), New CEO, new product roadmap, new foundry expansion with massive amounts of increased capacity, huge amounts of yearly revenue and profits, dividend, and many catalysts over the next 5-10 years to capitalize on. MobileEye may be one of the smartest acquisitions of any company recently. Facts are that Intel is a great company, but under new mgmt, the market has Intel in a show me/prove it to me trading range.
If you believe in Pat, which I do, Intel is a strong buy here. Remember, before Pat, Intel was thinking of outsourcing most of its new tech and eventually becoming less and less a foundry. Pat immediately said heck no, that is not what Intel is at its core and he immediately doubled down. Took balls that early on. Also, the fact that many senior engineers followed Pat back to Intel. This may be one of the most bullish indicators because it shows he is trusted and respected.
Price target is $80 by the spring, but any positive product roadmap news, geo-political issues in Taiwan, and this thing could move higher quickly.
Should be a fun 5-10 years to watch it all play out作者: sec2100 時間: 2021-10-3 12:55
Agreed that eventually valuations do matter. However, I don't believe the comparison of INTC to NVDA is as straightforward as you assume: i.e. they are both semiconductor companies and need to be valued by the same metrics. NVDA and INTC are very different companies even though they both manufacture semiconductors. NVDA has made good decisions over the years to focus more on high growth sectors of the semi market like AI and gaming. INTC has floundered with its tech roadmap and execution and has a much higher portion of its business coming from slower growing segments of the semi market. Confidence in growth also plays an important role in valuation of a stock and investors now have more confidence in NVDA's growth potential. INTC is in a position where it now has to prove it can grow at a higher rate and re-capture lost market share. Can it do it? The jury is out on this and it will take time (years) to prove this. Sure, by the numbers, INTC appears "cheap" but there is uncertainty now about its ability to execute. All this plays into the valuation. My suggestion is own some of both NVDA and INTC. They are different animals and you own them for different reasons: NVDA for growth, INTC as a turnaround/restructuring play. Maybe you hold your nose and own a smaller position in NVDA along side your larger position in INTC. I think it is a mistake not own some NVDA. I see your logic on INTC, but it may take a long time before you see a payoff on that bet.作者: sec2100 時間: 2021-10-3 13:21
jayn
01 Oct. 2021, 10:57 AM
Comments (1.14K)
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Intel's new EUV fab in Oregon is opening in 1H 2022. Their pilot line for the Meteor Lake chip began ramping in q3. Production to begin in mid 2022.
Intel has additional fab and packaging expansions planned in Ireland, Israel, Arizona and New Mexico, already announced. They stated they will announce, by the end of the year, additional large fab expansion plans in the U.S. and EU, tied to their IFS plans.
Their story, under the new CEO, is that they are going stop buybacks and sink their money into IFS. Aside from that, they were already targeting new developing markets in autonomous vehicles, 5G infrastructure, silicon photonics, Optane memory, ai ASICs and are putting their stake in the ground for discrete GPUs beginning next year.作者: sec2100 時間: 2021-10-3 19:14
If Intel can build high volume on TSM N6, they can gain Xe-HPG GPU market share in 2022 on availability alone.
Don't forget Xe-HP and Xe-HPC, which are designed for 42TF FP32 and 42TF FP64, respectively.