In today’s briefing:
- Intel (INTC.US): 18A May Have Been Too Rushed; Now All Hopes Rest on 14A.
- Shoulder Innovations IPO (SI.US): Expect Upside Vs. IPO Price Due To Superior Growth Profile
- Intel Q225. GM Obfuscation, Red Flags & 14A Now Officially A Risk Factor
- Weekly Update (AAF, NLOP, KHC)
Intel (INTC.US): 18A May Have Been Too Rushed; Now All Hopes Rest on 14A.
- On July 24, chip giant Intel announced that its latest 18A advanced process is progressing smoothly. However, the next-generation 14A process will be developed “based on confirmed customer commitments.”
- Apple (AAPL US) adopt Intel’s 14A process for its future M-series chips, while NVIDIA Corp (NVDA US) is expected to use the same process for its entry-level gaming GPUs.
- U.S. President Trump is imposing tariffs on countries around the world, which is indirectly pressuring some manufacturers to accelerate the establishment of U.S.-based production facilities.
Shoulder Innovations IPO (SI.US): Expect Upside Vs. IPO Price Due To Superior Growth Profile
- Shoulder Innovations Inc., a pure-play shoulder arthroplasty device company, is expected to IPO soon.
- The company’s amended S-1 puts the initial price range per share at $19.00 to $21.00, implying a market cap of ~$450M at midpoint on a fully-diluted basis.
- I have a positive view of Shoulder Innovations IPO and see upside vs. IPO price due to the company’s superior growth profile, industry-leading gross margins and capital efficient technology.
Intel Q225. GM Obfuscation, Red Flags & 14A Now Officially A Risk Factor
- Intel reported Q225 revenues of $12.9 billion, up $200 million QoQ, flat YoY but $1.1 billion above the guided midpoint. After that revenue beat, things went downhill from there.
- CEO Lip Bu Tan said he will review and approve all future company product designs prior to tape out. Sounds like a vote of no confidence in the design team.
- Intel’s 10 Q now lists the possibility of pausing or abandoning 14A as a risk factor with doomsday details about the implications for the company
Weekly Update (AAF, NLOP, KHC)
- Kraft Heinz (KHC) is currently evaluating a plan to spin off a significant portion of its grocery business into a new, distinct entity. The WSJ reported that this transaction is likely to occur.
The news comes a decade after the infamous merger of two of the biggest names in packaged foods that was orchestrated by Warren Buffett and Brazilian private equity firm 3G Capital Partners.
- This new entity, which can be referred to as “SpinCo,” would encompass many of the traditional Kraft products. The remaining company, or “RemainCo,” would strategically focus its operations on faster-growing segments, specifically sauces, spreads, and condiments.
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