Intel: Priced For Potential Of CPUs, Not For The Momentum Of The Foundry (Upgrade)

Kevin Anthony D. Arroyo 774 Followers Follow Summary Intel Corporation completed a $20 billion share issuance to fund capex and working capital, which will strengthen the company's balance sheet and enable the company to pursue calculated bets. Strengthening the balance sheet enables INTC to pursue emerging technologies and long-term value creation, which more than offset the dilution effect of a share issuance. Intel having a more equity-heavy balance sheet is imperative given the semiconductor industry's dynamism, exacerbated by artificial intelligence, which needs a more risk-tolerant capital base. I believe Intel is still undervalued, supported by strong CPU tailwinds and the foundry division's massive potential given the high barriers to entry in the leading-edge semiconductor manufacturing industry. yorkfoto/iStock Unreleased via Getty Images Introduction Intel Corporation ( INTC ) recently announced a share issuance of approximately $20 billion. The proceeds from the issuance will be used to fund the company's capital expenditure and working capital needs as the This article was written by Kevin Anthony D. Arroyo 774 Followers Follow Kevin Anthony D. Arroyo has been a self-taught individual investor for 5 years and is a graduate in Information Technology. As an individual investor, Kevin focuses on individual stocks of businesses with strong economics that are selling at a reasonable price. Kevin focuses on industries that are within his circle of competence, such as information technology, retail, and consumer products, but is open to delving into other industries to expand it.Kevin's core investment principle is value investing, but he believes in acquiring knowledge from diverse sets of investing disciplines such as growth, GARP, cigar butt, private equity, and venture capital, as this accumulation of knowledge from these multiple disciplines enables the investor to view the investment process from multiple perspectives. Kevin is also a strong proponent of emphasizing the importance of competitive strategy and competitive advantage, as fundamentals in these areas are a more reliable predictor of a company's future performance rather than what's shown in the income statement or the current judgment of the stock market for a particular stock.He is a firm believer in Charlie Munger’s ‘Latticework Of Mental Model’ approach to investing. Such an approach gives the investor multiple perspectives on a particular investment opportunity and can provide an edge rather than dogmatically following a single investment approach. He believes that this approach is key to long-term investment outperformance. Analyst’s Disclosure: I/we have a beneficial long position in the shares of INTC either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.