Buy Alert: Is Intel (INTC) Ready to Dominate the CPU Market Once Again?

The semiconductor powerhouse Intel Corporation (INTC), which annually unveils new innovative desktop CPUs, is causing a stir with its recent announcement of the 14th-generation Raptor Lake processors. Rumors are swirling about the imminent launch of the Intel Core i9-14900KS, touted as the fastest-ever desktop processor, set to debut in March.

Now, let’s assess the prospects of Intel’s rumored Core i9-14900KS processor in the competitive CPU market and the implications of this product launch for INTC investors.


Launched in October 2023, Raptor Lake CPUs embody a hybrid architecture employing performance and efficiency cores. INTC’s rumored Core i9-14900KS CPU boasts eight high-performance Raptor Cove cores, 16 energy-efficient Gracemont cores, and a 68MB cache, enhancing computational prowess and multitasking capabilities.

The forthcoming CPU showcases a higher default TDP of 150W compared to its predecessors. Also, it achieves a maximum turbo clock of 6.2 GHz, surpassing the 19400K and 19400KF models by 200 MHz. The enhancement is expected to bode well for performance-intensive tasks and demanding applications.

Nonetheless, a significant drawback looms over this final addition to the LGA 1700 socket range of CPUs: an unprecedented power draw. Leaks suggest the chip may consume up to 400W under heavy loads, necessitating robust cooling solutions and ample power supply provisions.

Acquiring sufficient Raptor Lake Refresh processors capable of operating at exceptionally high clocks should pose minimal challenges, given INTC’s substantial production capacity. However, the potential exorbitant power draw raises concerns regarding enthusiast adoption, necessitating formidable cooling solutions to mitigate heat dissipation concerns.

That being said, the Core i9-14900KS CPU, with its advanced specifications and outstanding performance, may initially boost INTC's stock due to enhanced anticipation but could face scrutiny due to concerns regarding power draw.


A recent leak has unveiled the anticipated price of INTC’s upcoming flagship gaming CPU, the Core i914900KS. Priced at a staggering €752 including VAT ($812.90) and €640 without ($691.83), it surpasses its predecessor, the 14900K, by €146 ($157.83). The revelation stems from a French online retailer, indicating a significant price hike.

Multiple European retailers are now listing INTC’s forthcoming Core i9 14900KS CPU. Leakers are showcasing both boxed and tray versions at €768 ($830.20) and €752 ($812.90) on the French platform PC21. While seemingly high, a $699 price tag seems feasible considering a direct USD to Euro conversion, aligning with earlier models’ pricing.

From an investor perspective, the pricing strategy could have both positive and negative implications. On the one hand, if customers are willing to pay the listed prices for the Core i914900KS processor, it could lead to increased revenue by capturing a large portion of the market demand and potentially higher stock prices.

Investors may view this as a sign of INTC’s ability to command premium pricing for its products, which could enhance shareholder value.

On the other hand, there’s a risk that the higher price could deter some consumers from purchasing this new Intel processor, mainly if competitive products offer similar specifications and performance at a lower cost. If sales fail to meet the company’s expectations or if there’s backlash from consumers over the pricing, it could negatively impact INTC’s financial performance and, consequently, its stock price.

Consumer Demand

Consumer demand for Core i9-14900KS CPU will likely remain robust, driven by limited supply expectations. Reports suggest it will be a limited edition, heightening its exclusivity and desirability among tech enthusiasts.

Despite potential bans on other INTC CPUs in Germany, the Core i9-14900KS is expected to be available globally. The imminent release of this Special Edition CPU is further supported by tests conducted on production units, indicating an impending official announcement.

The scarcity factor combined with the promising performance of the Core i9-14900KS is likely to create a strong demand among consumers, driving the company’s revenue streams and growth.

Competitive Landscape

INTC faces new challenges from emerging Asian competitors like Taiwan Semiconductor Manufacturing Co. (TSM) and Samsung Electronics Co., establishing their market position in the U.S. However, the Biden Administration’s proposed $10 billion subsidy could bolster INTC’s U.S. presence, supporting CEO Pat Gelsinger’s lobbying efforts.

Gelsinger is spearheading INTC’s push for government backing, which is crucial for its ambitious projects: a $20 billion Ohio facility, a $20 billion expansion in Arizona, and a $3.50 billion investment in New Mexico. The endeavors hinge on securing funding, which is indicative of INTC's strategic focus and future direction.

Moreover, NVIDIA Corporation (NVDA) is venturing into custom processors for cloud and AI amid a surging demand for AI chips. INTC Foundry Services could emerge as a viable alternative for custom processors, as suggested by analysts at Bank of America.

INTC aims for significant growth in its foundry business, eyeing the second-largest global position by 2030, according to Stuart Pann, the SVP and GM of Intel Foundry Services.

Bottom Line

Although not the highest-valued semiconductor company on Wall Street, INTC leads in revenue, according to Gartner Inc. (IT). While yet to be confirmed, rumors strongly suggest the impending release of a Core i9 KS special edition. The company is strategically allowing the current Core i9-14900K time to flourish, potentially enhancing the special edition’s quality.

INTC reported strong performance in the fourth quarter of fiscal 2023. It posted earnings per share of $0.63, surpassing analysts’ estimate of $0.22. Additionally, the company’s revenue totaled $15.41 billion, compared to the consensus estimate of $15.17 billion for the quarter ending in December.

However, concerns linger regarding INTC’s outlook for the ongoing quarter. The company expects a fiscal 2024 first-quarter net loss of $0.25 per share on $12.20-13.20 billion in sales.

Moreover, INTC CEO Pat Gelsinger has asserted that the core businesses, including PC and server chips, are expected to perform at the lower end of the company’s seasonal range in the current quarter. Overall sales are anticipated to decline due to weaknesses in subsidiaries and revenue decreases from other divested businesses.

On top of it, INTC has been aggressively cutting costs by implementing workforce reductions and divesting smaller business segments. In the past year, the company announced plans to spin off its programmable chip unit following the transformation of its self-driving car subsidiary, Mobileye Global Inc. (MBLY), into an independent entity in 2022.

CFO David Zinsner disclosed that the company successfully reduced costs by $3 billion last year, and it divested or sold off five different business lines. While such initiatives may enhance long-term efficiency, short-term impacts on financial performance and stock valuation are uncertain.

Institutional adjustments to INTC holdings further underscore mixed market sentiment. While some institutions are increasing their positions, others are decreasing or exiting entirely, conveying a mixed sentiment among investors and volatility ahead.

Out of 2,846 institutional holders, 1,274 increased their positions. Moreover, 406 holders initiated new positions, acquiring 32,935,008 new shares. However, 1,306 institutional holders have decreased their positions, with 104 holders ultimately selling out their positions, disposing of 17,276,625 shares.

Despite its leading revenue status and potential strategic product releases, Intel’s outlook for the first quarter of 2024 falls short of analysts' expectations. Given these factors, it could be wise to wait for a better entry point in this stock.

Is There Surprising Money to Be Made in Mobileye Global (MBLY)?

Intel Corporation (INTC) CEO Pat Gelsinger acquired 3,600 shares of Mobileye Global Inc. (MBLY) stock at an average per share price of $27.75 on January 29, according to Form 4 filing dated January 31. The transaction was worth $99,915 in total. After this purchase, Gelsinger now owns around 129,095 shares through his trust.

Pat Gelsinger has purchased MBLY’s shares four times separately since the company became publicly traded in October 2022. Excluding the most recent one, his last purchase was on October 27, 2023, when he acquired 2,845 shares at an average per-share price of $35.18.

Meanwhile, Director Saf Yeboah-Amankwah recently reported an insider buy. As per Form 4 filling, on February 1, Yeboah-Amankwah bought 940 shares at an average per-share price of $25.67, bringing his total stake in MBLY to 48,459 shares. The recent transaction marks Yeboah-Amankwah’s second purchase of MBLY stock since it started trading publicly.

On October 28, 2022, Yeboah-Amankwah acquired 47,519 MBLY shares at an average per share price of $21.

Overall, during the past year, Mobileye insiders have sold $1.57 billion worth of shares while purchasing $1.32 million worth of shares. In June 2023, Intel sold about $1.5 billion from its MBLY stake. Even after the sale, Intel owned 98.7% of Mobileye’s voting shares, a decline from 99.3%.

Market participants closely watch insider activity, as the transactions can reflect existing sentiment around the prospect of the business. Typically, investors get a confidence boost in the stock when there are signs of solid insider buying. Even Mobileye’s short-term challenges didn’t stop Pat Gelsinger from making the recent purchase, as he could be confident about the company’s long-term outlook.

Moreover, Goldman Sachs analyst Mark Delaney has maintained his bullish stance on MBLY stock, giving it a Buy rating despite the company’s bleak 2024 guidance. He pointed out that management’s lower outlook for 2024 is due to supply chain-related customer inventory adjustments and specific production levels from Original Equipment Manufacturers (OEMs).

Delaney looks beyond the near-term challenges and focuses on Mobileye's long-term potential. He remains optimistic about future growth and cash generation prospects. The shift toward high-value solutions such as SuperVison and Chauffeur would position MBLY for growth in the long run.

However, despite attractive insider buying lately, MBLY’s shares are down more than 15% over the past month and have declined nearly 31% over the past six months.

Now, let’s take a closer look at several factors that could impact the stock’s performance in the near term:

Latest Developments

On January 22, 2024, HiRain Technologies, a system provider of intelligent driving solutions to automakers in China, announced the mass production of the first Mobileye EyeQ™6 Lite-based ADAS system, scheduled to debut in China in the second quarter of this year.

The newest member of MBLY’s systems-on-chip portfolio, EyeQ6, is engineered to redefine performance and efficiency in core and premium ADAS offerings. EyeQ6 Lite features Mobileye’s vision-based sensing technology and excels in real-time detection and analysis of its surroundings. The company’s partnership with HiRain reflects its shared vision for high-quality automotive innovations.

Also, on January 9, MBLY expanded its existing relationship with Mahindra & Mahindra Ltd. (M&M), an Indian-based leader in automotive, farm and services businesses. Mobileye will collaborate with M&M to introduce several solutions based on Mobileye’s next-gen EyeQ™6 systems-on-chip and sensing and mapping software, including an intent to develop a full-stack autonomous driving system.

“As more advanced models emerge, we see great opportunities for growth in India and look forward to executing with Mahindra to bring Mobileye SuperVision-based services to one of the most challenging driving environments in the world,” said Mobileye CEO Prof. Amnon Shashua.

Robust Last Reported Financial Results

For the fourth quarter that ended December 31, 2023, MBLY reported revenue of $637 million, beating analysts’ estimate of $633.79 million. This compared to the revenue of $565 million in the same quarter of 2022. The company’s adjusted gross profit was $439 million, an increase of 5.5% year-over-year.

The company’s adjusted operating income rose 13.8% from the prior year’s quarter to $247 million. Its adjusted net income rose 260.3% year-over-year to $228 million. It posted adjusted earnings per share of $0.28, compared to the consensus estimate of $0.27, and up 3.7% year-over-year.

Furthermore, Mobileye’s cash and cash equivalents stood at $1.21 billion as of December 30, 2023, compared to $1.02 billion as of December 31, 2022. The company’s current assets were $2.07 billion versus $1.52 billion as of December 31, 2022.

“Our fourth quarter performance was very strong across the board but is understandably overshadowed by the inventory build-up at our customers which will impact our growth in 2024,” said MBLY’s CEO Amnon Shashua.

Inventory Issues Prompt Revenue Warning

Mobileye, an Israel-based autonomous driving technology company, warned that customer orders for auto chips would fall dramatically short of the prior year’s quarter.

The company said that automakers built up on Mobileye’s chips to avoid part shortages after the global supply glut crisis that persisted through 2021 and 2022 hampered manufacturing.

“As supply chain concerns have eased, we expect that our customers will use the vast majority of this excess inventory in the first quarter of the year,” MBLY said in its preliminary full-year outlook. The excess inventory reflects a pullback in demand from so-called Tier 1 customers, as they will not be placing orders for new chips at the same level they did in last year’s quarter.

For the first quarter of 2024, MBLY expects revenue to be down about 50%, as compared to the 459 million of revenue reported in the first quarter of 2023. Also, the company currently thinks that over the remainder of the year, the revenue will be impacted by inventory drawdowns to a much lesser extent.

The self-driving technology company anticipates lower-than-expected volumes in the EyeQ® SoC business, which will temporarily impact its profitability. Like revenue, MBLY’s first-quarter profit levels are expected to be considerably below the subsequent quarters.

Mobileye expects its first-quarter 2024 operating loss to be in the range of $257 million to $242 million. Excluding amortization of intangible assets and stock-based compensation, the company’s adjusted operating loss is projected to be in the range of $80 million to 65 million.

For the fiscal year 2024, MBLY expects revenue to be between $1.83 billion and $1.96 billion. Its full-year operating loss is anticipated to be in the range of $468 million to $378 million. Also, the company's adjusted operating income will be in the range of $270 million to $360 million.

Mixed Analyst Estimates

Analysts expect MBLY’s revenue for the first quarter (ending March 2024) to decline 49.6% year-over-year to $230.71 million. The company is expected to report a loss per share of $0.06 for the ongoing quarter. However, Mobileye has surpassed the consensus revenue and EPS estimates in each of the trailing four quarters.

For the fiscal year ending December 2024, Street expects Mobileye’s revenue and EPS to decrease 8.5% and 51.9% year-over-year to $1.90 billion and $0.39, respectively. However, the company’s revenue and EPS for the fiscal year 2024 are expected to increase 42.4% and 102.6% from the previous year to $2.71 billion and $0.80, respectively.

Extremely Stretched Valuation

In terms of forward non-GAAP P/E, MBLY is currently trading at 69.15x, 337% higher than the industry average of 15.82x. The stock’s forward EV/Sales of 10.90x is 793.5% higher than the industry average of 1.22x. Similarly, its forward EV/EBITDA of 53.76x is 444.2% higher than the industry average of 9.88x.

Moreover, the stock’s forward Price/Sales multiple of 11.52 is significantly higher than the industry average of 0.90. Also, its forward Price/Cash Flow of 47.56x is 367.8% higher than the industry average of 10.17x.

Decelerating Profitability

MBLY’s trailing-12-month gross profit margin of 50.36% is 42.1% higher than the 35.44% industry average. However, the stock’s trailing-12-month EBIT margin and net income margin are negative 1.59% and negative 1.30% compared to the industry averages of 7.68% and 4.66%, respectively.

Furthermore, the stock’s trailing-12-month ROCE, ROTC, and ROTA of negative 0.18%, negative 0.14% and negative 0.17% unfavorably compared to the respective industry averages of 11.73%, 6.15%, and 4.12%. Also, its trailing-12-month asset turnover ratio of 0.13x is 86.4% lower than the industry average of 0.99x.

Bottom Line

MBLY beat earnings and revenue analysts’ estimates in the fourth quarter of fiscal 2023. However, the self-driving technology company issued a revenue warning as it deals with excess inventory.

As per the company, its Tier 1 customers stocked up on chips following the global supply chain crisis that persisted in 2021 and 2022 and are now opting to work with excess inventory, resulting in a significant pullback in demand for its Advanced Driver Assistance Systems (ADAS) products.

Mobileye forecasted first-quarter 2024 revenue to be down nearly 50%, although the company believes inventory drawdowns will impact the revenue to a lesser extent over the balance of the year.

The near-term concerns didn’t stop Intel CEO Pat Gelsinger from purchasing around 3,600 shares of MBLY stock, with Mobileye Director Saf Yeboah-Amankwah joining along. When we notice any attractive insider activity, we shouldn’t react by impulsively buying the stock.

Given MBLY’s significantly elevated valuation, declining profitability, and bleak near-term prospects, as excess inventory concerns would cause declining revenue, it could be wise to avoid this stock for now.