Martin Shkreli Analyse Intel Inc (Excel Valuation Of Stock)

okay here's the guidance wow 10 to 11 billion 30% gross margin wow what a stinker they laid an egg that's not a good run rate right [Music] for interesting they didn't give guidance for 2023 until the Great American shrinking [Music] company that might go out to a business meeting a little later let's see my business meetings we smoke weed I if you knew that we like light Blunts and talk business had 10 Executives coming from Japan they say Mr shuker son we like to make partnership with your company I said yes but will you smoke this first I'm just kidding I've never smoked I've never smoked a I haven't had one cigarette my whole life I haven't had one marijuana cigarette my whole life just not uh just not my thing just blaze 420 blaz it nightmare blunt rotation mark cubin my nightmare blunt rotation Mark Cuban Camala Harris trying to think who else I don't like maybe Jason calanis yeah that's a nightmare blunt rotation she would I smoke a blunt for half a billy yeah yeah no [Music] problem shean ping that'd be a funny [ __ ] guy to smoke blunt with dream blunt rotation uh Nicki Minaj Anna Kendrick think you get my drift um Sydney [Music] [Music] Sweeny throw the homie Scott Aronson in for fun maybe Lex Freedman could be in the back [Music] too what's up girls who's that nerd don't worry about my buddy Lex a crazy Russian guy oh yeah another nightmare blunt rotation would be [ __ ] Andrew Tate imagine listening to Andrew tapate La on and on what color is your bugi man shut up the [ __ ] do you know about money the [ __ ] do you know about anything May me smack it you know who else would be really annoying to hang out with Sam bankman that guy seems annoying as [ __ ] this [ __ ] his voice is so annoying high pitched ass voice acting like he's smarter than everyone else man [ __ ] you he'd be trying to sell the blunt that's a fact Bill Clinton would definitely definitely be chill but still not somebody I like but he's cool he's a lot cooler than you know who [Music] Carolyn tremendously more money that's funny Andrew Tate Andrew Tate I don't care about the FED do they even do anything do they set interest rates or does the market on interest rates do you guys know somebody tell me please remind me I don't get like people like Joe Rogan so much he's got a good sense of humor I guess I don't know [Music] I like really smart people I don't know he's the every man sounds about right it's kind of like what Howard Stern was right I'm not the every man I'm not trying to be the every man trying to be the best man you know what I mean Prometheus Unchained trying to WAP trying to blow you away with these bars all right so Intel revenue is going to drop 40% next quarter 40% you're funny I'm going to see Lex shortly I don't think Lex cares if I like Joe Joe Rogan or not I'm not saying I don't like Joe Rogan I just don't see the appeal so Intel's revenue is dropping 40% next quarter I mean it's been on that trajectory right but man what a shadow of its former self I don't even know how to Value this right yeah I'll be on Lex Lex's podcast in the next week or two I mean that's just my opinion I don't I mean I'm sure it's a good product I just don't care to watch it so what's the shape of Intel's recovery going to be like this could this be like the worst year ever for this [Music] company can you imagine this could be Intel is worst year ever oh yeah I should probably get all my prison stories in place I should stream if I'm not um in a meeting I'll stream The Meta earnings that's a good idea so why the drop in revenue is a good question basically what I think's happening I'm sorry to turn this into the semiconductor hour but basically what I think's happening is AMD and Nvidia have taken over a lot of their Market as well as Apple so let's look at AMD really briefly China China it's all China's fault China good luck I haven't read uh nii too much now my dad is a big philosophy guy I don't have the time famous people I admire Scott Aronson Nick Bostrom um um there's not too many business people I admire um I admire Warren Buffett obviously Terry tow okay okay now we're talking I do admire Terry I'd smoke a blunt with Monger he's not my favorite guy though it'd be funny if Charlie Munger almost 100 years old wanted to smoke a blunt with me that'd be dope I would smoke weed for the first time ever no problem Caron I I admire is a weird word right I respect Carl ion I don't know if I admire him I guess I do he's he's similar to me in a lot of ways he grew up in New York rough and tumble kind of guy made into the big business World by pushing pushing his way in here get out of my way I want in he willed himself to success pretty cool we're going to eth Denver yes we are I'll see you there if anybody wants to come hang out eth Denver [ __ ] I might just host a party smoking with butterine actually vitalic butterin would be a decent uh decent blunt rotation I like Soros the traitor I don't know much about Soros the person AMD Incorporated 1969 wow did not know that the zyink deal did zyink close yeah I think it closed closed like six months ago maybe well it's weird because like if you look at AMD and Nvidia they're still relatively small players compared to Intel [Music] and I have a Texas Instruments model although those guys don't aren't really Apples to [Music] Apples look at big three so if you define the semiconductor Market as these three companies which obviously it's not [Music] that Intel's share market share of that has been 80% then 75 then 65 then 59 brutal yesh that's a lot of market share loss dat a dog roof that dog is my favorite company DD OG data dog that should be their commercial okay and if it goes to 50 billion that's even scarier CU now you're looking at even less pretty ugly are you like New Relic I just we just subscribed to New Relic for [Music] AMD is no debt damn issue some Deb dog oh I guess with zyink they're probably going to issue a lot of Deb although I don't know if that was a stock deal or what call up Goldman man call Morgan Stanley sell me some bonds you got to diversify your bonds [Music] brother at least it well I got to look at the most recent queue for Intel or for AMD before I can say this what I want to say then what I want to do is next steps I mean the numbers are great and everything but I'd like to look at the actual Wafers and product specs I want to buy a wafer I'm just going to buy one just hang it up in the wall so I really understand the wafer I'm going to put my ear to it see if it tells me anything silicon I'm going to buy a Applied Materials lithography setup I'm going etch away for myself now you got to learn how to do this feel me you can't just pretend you got to do it IRL can't alar as a semiconductor analyst you got to really you got really get the get that equipment do a little deposition get a clean room in in the crib I got two monitors I got two pH baby's first wafer okay sound's messed up net income operating expenses think I see what [Music] happened [Music] yeah so just got to be a decent um website for Semiconductor product characteristics and other information performance I I used to be into desktop performance computing not really my thing anymore I wasn't that it wasn't even that into it back then it's it's hard to keep up you really have to get into the overclocking scene and get really excited about this stuff which is not really my thing taxes are all messed up for this company all right so obviously AMD has K absolutely killed it right they've done even better than Nvidia so something's got to change for Intel to I'm going to see if AMD reported Q4 I don't think [Music] so looks like they did last night y okay 23.6 wow what a beast they give guidance I doubt they gave guidance right get first quarter so down your year stocks up it looks like the simple story is AMD is just murdering Intel there's really no other way to put it right these guys make the same [ __ ] product one of them has Revenue going up a lot one of them has Revenue going down a lot not too much to this story so the question is when will that stop and has this happened before amd's had like these fits and starts and I don't know how they can out research Intel with a budget that's like on10th of the size Reminds Me of Something art levenson told me a long time ago just talking about the differences between organizations and their R&D oh okay well this includes zy links so we got to be a little careful zyl links probably contributed most of that growth so be little careful there although they didn't close zy links for the full year right but the zyink steel made them a bigger company so keep that in mind looks like it was almost all a stock deal they don't have any debt they don't much 2467 yeah it looks like it was almost completely a stock deal looks like Intel and am of are roughly the same market cap or Enterprise Value sad day sad day so they're saying 5 billion wow for q1 5.3 right it's a lot better than Intel's predicting wow man sickening [Music] sickening all right so let's try to model what the future of Intel will look like um it's going to be tricky but if anybody can do it it's me let's go out to 2035 where we're not going to assume any CC locality we're going to assume that the world exists without booms and busts we're going to assume that there's a steady growth in GDP before I do this I want one more piece of data we'll look at biotech calm down calm your calm your ass we looked at some biotech yesterday I'm here to please somebody wanted to see Intel I was curious about Intel don't make me escort you out the building sir sir sir sir you need to leave right now sir what I do that's when I put the the muscle to to the to his elbow sir for I should I make an Excel tutorial I don't know it's I think it's pretty simple software you just got to dive into it don't be [Music] afraid oh man I picked the wrong gear [Music] [Music] for gosh darn it for oh my gosh Intel spent spending like 11 billion in R&D back then when AMD was planning its products with 5% of the spend and and is gaining Market on them sad pathetic [Music] [Music] for [Music] [Music] [Music] for it's amazing part of me thinks they can make a comeback part of me is wondering so it's almost like a biotech company where you have have to do a probabilistic quantum mechanical model I'm joking about the quantum mechanical part but you do have to sort of consider a duality that maybe they make it maybe they don't [Music] for [Music] [Music] H we're almost ready to start thinking about what could a share of Intel be worth that's what we spent the last two hours preparing for this moment are you ready whoever asked me is probably long gone they're like F this I don't have the patience you need a lot of patience when you work in finance you got [Music] to really be willing to you know ADHD is not your friend in this industry you got to be willing to sit here think plug crunch talk to people get to the bottom of thing wow look at this [Music] over nine years they had cash flow of 13 billion almost fairly regularly and then just had this enormous problem in 2022 and 2023 make a lot of sense right these are also years of uninterrupted growth in the economy do I need to go back even a little more back to like a more of a recession type period I think I might have to only take five more minutes we've been here two hours I might as well for [Music] Tech is funny like in Tech you need to know the next quarter that's why The Insider Traders love Tech you need to know what's going on next quarter before it happens because otherwise you really can come up with a long-term thesis based on the technology but you don't know if that thes this is on track or not you could do some probabilistic waiting of like okay this is a theoretically a good opportunity but if the quarters don't start working in your direction doesn't really matter what you project that's why Tech is very tricky and you need to keep your ear to the ground and watch the quarterly reports like a hwk because if something's going wrong you got to redefine your whole thesis and everything's [ __ ] so Tech requires the so-called Channel checks which are basically legal if you do them the right way you're asking people well how there how's the business going for Intel or you like their chips or do you not like their chips and if they say no you exit your investment but basically you're kind of getting Insider info so I don't like that whole process of tech investing it it irks me it's always irked me um and it's especially ironic given that you know I've been to prison hedge fund the hedge fund world is very dangerous [Music] trop there's a lot of people who have gone to jail for doing Channel checks too aggressively so how do you know what the line is right how do you know like oh well you can ask that question but don't ask that question and you know there's some pretty good Frameworks and rules for it don't get me wrong it's not that hard but all right you can see that there was some volatility in their cash flow this year 2006 2008 will be really interesting it's not the same in Pharma no in Pharma you can bet on product trajectories and they're much like less Vault till quarter to quarter because you can't change the product attribute you know you don't get new product releases you get one product release every 10 years so it's a bit different and you can you can basically predict how well the product will do based on the product attributes whereas here it's it's really not that easy you kind of have to seeed the sales with your own eyes if that makes sense so looks like 2008 they didn't have much of a revenue decline uh even though that was a very challenging year cyclically let's see if they were lagging indicator in 2009 was rough for them yeah 2008 and 2009 were were rough but they weren't this rough they weren't down 40% jeez what the heck is going on remember that Intel used the bgs as their uh ad campaign that was great until used to have 6.2 billion shares outstanding now they have I think I remember when they had seven now they have [Music] [Music] four yeah so the the 2008 recession didn't phase Intel very odd semiconductor um cycle and the economic cycle aren't 100% overlap I guess so the semic cycle right now is hitting this big bump but you wouldn't know it if you talked to AMD you would sort of know it if you talked to Nvidia they've had a big [Music] slowdown yeah there's the Boom in the cycle right back in 2010 to Peak cash flows so so they have a business cycle and a market share cycle like a product cycle and they're at the trough of both which is why it's like a perfect storm and usually you want to buy stocks right when there's a perfect storm because it can't get any worse although there's no reason to think it can't get it can't get worse for Intel that's sort of what I'm saying about the directionality and I guess instant instantaneous rate of change basically for Intel and for most attack but especially for semiconductors you have that concept of like you have to know how the business is doing right now like almost like a week to week thing to make sure that it's on track maybe there's some like savants who can see the technology and say oh they really have this Advantage but generally speaking that's kind of not the way it works usually no matter what the technology looks like you sort of have to see the sales coming to fruition so they had 15 billion in in cash flow free cash flow back then 2011 that seemed like another cyclical top and the quarterly reports are are basically what those updates are right but [Music] [Music] is [Music] okay let's let's uh I'm not a big fan of you doing graphs and Excel but let's this is an interesting data set this is free cash flow for Intel I just want you to see kind of like how different as semiconductor companies cash flow looks for most companies real big swings in net income and this is something else right unprecedented [Music] all right so let's let's take a stab at this I'm going to assume the semiconductor Market grows at 5% perom until 2035 that's not a crazy assumption I think I'm going to assume that Intel's share of this Market never recovers to 80% it does kind of recover to 60 maybe 65% let's say that's really simple analysis what happens if intel gets back a little bit of its prior success doesn't have to get all of it back just a little well maybe half um let's say it margins maybe we don't go back back to a peak of 65 but they go back to say high 50s [Music] for [Music] [Music] is [Music] it's like a probabilistic deep value play in some ways don't worry about the things in my room all right creeper stop creeping creepy internet people I have a new cat coming very [Music] shortly going to do a big cat unveil unveil unveil party soon to replace trashy all right we get a valuation of 200 billion for Intel 50 a share quite a lot more than 27 so could it be a deep value play very lofty assumptions yes yes yes [Music] um if they make their comeback a partial comeback but again it's it's sort of Frau with that guess work but my guess is it typically in in in this kind of investing you have to make some probabilistic gamble and I hate to gamble and you don't have to gamble right you only you you can gamble basically assume Intel doesn't recover very much but it can hold its own they're still the sort of preferred chip customer I mean it's their business is still you know three times an AMD let's make some simpler assumptions and if they don't recover if they barely recover at all you don't lose any money so it seems like I mean it could certainly get worse if things get worse for them you will lose money so the market basically assumes they make a very very tepid recovery and remember they're in a cyclical tro and a product trough so the it's supposed to look like it's the worst right now and it kind of thinks you know I kind of think that I kind of feel like um I don't know the market assuming they never recover seems like a a just doesn't seem like the right reality they've never had margins this low they've never had yeah I don't know it it's certainly possible that that's what happens and again I have to learn more about the industry but it seems like a decent speculative long you know they have to recover just a a little bit of their prior success and the stock is a double but people said the same thing about IBM and all these other companies but again you have to think about it probabilistically not as like you're holding a gun to your head you know is this worth 1% of your portfolio yeah probably you know