$Intel(INTC.US) up 11% on June earnings.
• My bottom line. What's going on is much bigger than INTC. Results are a sign that we are still much early in AI than many think.• I think of Intel CPUs as an accessory to the AI buildout. Its business is getting pulled along by NVDA.• To put it into perspective, $NVIDIA(NVDA.US)’s GPU business is 13x bigger than Intels most exciting segment, DCAI, with NVDA expected to grow at 96% in July. Intel DCAI just printed 59% growth. Intel is more successful at beating the law of large numbers. • Intel is great and there are better AI companies to own to invest in AI. Deepwater does not own shares.• The guide ups have been getting larger over the past two quarters. Assuming they hit the high end of guidance, they guided Sep revenue up 11% this quarter, up 13% in Mar-25, up 1% in Dec-25, and up 3% in Sep-25.• This is important because it’s a sign analysts are having a hard time keeping up with the true growth. That means the Street still doesn’t get the big picture of what’s going on. What is going on is we are earlier than most believe in AI infrastructure buildout.• Margins are likely going to be flat in September, at 42%. That’s a good sign vs what we say from GOOG last night.• NVDA is 13x bigger and almost 2x.Valuation: Intel trades at 61x CY27 EPS. NVDA at 17x, and AMD at 40x.More to come on the call.Source: Gene Munster
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