In its fourth quarter advisory O'Keefe Stevens Advisory said it had dumped all its Intel shares because its future was too uncertain.
The company purchased Intel shares in August 2020. Since then Intel had lost its technology lead to TSMC, AMD, and others in the CPU and Data Centre group surpassing Chipzilla.
“Even though Intel had years of business underperformance because of delays in releasing new products, we believed the amount of capital spent at the company would allow them to catch up and reclaim market share. We knew this type of turnaround, given the company’s size, was not going to be quick or easy. However, we believed the price offered more than compensated us for the risk of failing once again,” the advisory said.
The outfit was relieved when Intel announced Pat Gelsinger as the new CEO.
“We were happy with the hire as Pat was Intels original CTO, helping Intel become the dominant player in the industry it once was. We became increasingly worried that Pat was not the right guy in the months and quarters following the announcement,” the report said.
“Gelsinger appears to be viewing the world through rose-coloured glasses (though we do recognize the CEO is the heart and soul of the organization, so we understand to a certain extent why he talked the way he did). Intel’s FCF gave us some comfort that it could afford to continue investing in new products while repurchasing shares or making acquisitions,” the report moans
The report said that the huge cash that Intel is spending to catch up is “betting the farm to return to a market-leading position.”
“While the future for Semiconductors is very bright, and end markets such as Data Centers and Autonomous vehicles are growing rapidly, we worry about the potential ramifications should INTC’s investments prove to be ill-fated like the past decade,” the report said.
The company said no one can be certain what Intel will earn in the next year and five years on there is nothing to guarantee its future.
Meanwhile, Hedge Funds appear to be ignoring the company. Chipzilla was in only 66 hedge fund portfolios at the end of the third quarter of 2021, compared to 78 funds in the previous quarter.
