• UnderpantsWeevil@lemmy.world
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      2 hours ago

      Debt, both on-the-books and anticipated.

      Intel’s investments in the Titanium chipset have effectively dead-ended. They can’t get below 7nm efficiently. Meanwhile, you’ve got companies in Taiwan, Korea, China, and Japan breaking into the 3nm and 2nm scales. To catch up, they’re looking at hundreds of billions if not trillions of dollars in technical debt.

      Yes, they can keep churning out existing processors at huge profits in the moment. But the face value of these processors plummets with every new step in Moore’s Law. This amounts to asset depreciation, which means Intel’s value is heavily overstated on the basis of asset cost alone.

      I won’t argue that NVIDIA is overvalued. But I think the degree to which they are overvalued is often misattributed to speculation and avoids the real specter haunting the company… competition. NVIDIA’s market dominance and the escalating demand for their technology means the sky really should be the limit for their growth. Demand for AI processing is at the forefront of these expectations. But a rival manufacturer capable of cutting into demand for their units would dramatically undermine their profitability.

      Its the same with firms like Microsoft and Facebook and Boeing. So much of their dominance is predicated on the theory that people will never leave these walled gardens and their margins being enormous purely because they controlled a critical commodity/patch of technical real estate.

      There was - incidentally - another enormous company that seemed to have the market cornered in its industry and got complacent with its R&D and long-term investment strategies… Intel.

    • Evil_Shrubbery
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      2 hours ago

      Well, while outstanding in current (we are living in a 20++ year bubble without much correction - no, when market values/indexes/cap rebound within a year, or month, with mostly the same main players) times, and especially for a successful company in the tech sector, having more assets than market cap isn’t that weird.

      As long as market value is above book value, it’s fine.
      And when it’s not, it’s prob a bank after 2012 (tho prices are generally way closer to book than they were before) :D.

    • Pasta Dental@sh.itjust.works
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      3 hours ago

      Fear mongering articles making it seem like they are doomed and will go bankrupt after bad quarterly results were announced. Articles were probably sponsored by rich people wanting to buy Intel stock for cheap. But they won’t go bankrupt because the US gov./army need Intel to stay relevant against China, and Intel is basically the only American company that both designs and fabs their own processors and that is still relevant.

      That and the fact that Nvidia is over valued (they are valued at 30x the value of their assets).

        • sugar_in_your_tea@sh.itjust.works
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          3 hours ago

          Yup. I wager the vast majority of that is AI hype. Nvidia is the king there and in datacenter GPU compute in general, and investors are betting that Nvidia will continue to dominate and that market will continue to be relevant and grow.

          I have my doubts, but as a famous economist once said:

          Markets can remain irrational a lot longer than you and I can remain solvent.

          So I’m not putting my money where my mouth is just yet.