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Here is the performance of our current active portfolios:

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Intel’s Recovery

Intel's most recent earnings report created a fascinating disconnect: The company delivered strong results but the stock dropped 10%.

Intel beat revenue expectations by nearly $1 billion.

Read that again, Wall St estimates were off by almost a billion!

Not only that, revenue came in $500 million above management's own guidance.

Add to that: this was the third consecutive quarter of beating estimates.

You wouldn’t know that by just looking at the stock chart.

The Foundry "Problem" That Isn't

CEO Lip-Bu Tan announced a shift in foundry strategy.

Instead of building first and finding customers later, Intel will now require confirmed commitments before major investments.

The market didn’t like this.

But this change makes complete sense.

Over four years, Intel has invested ~$95 billion with minimal customer traction.

Intel's Foundry division lost $3.2 billion, up from $2.8 billion a year ago.

The new foundry strategy ends this cash burn.

This isn't retreat.

This is discipline.

Intel's Hidden Leverage

Here’s the thing: Only 3 companies worldwide can manufacture leading-edge chips:

• TSMC

• Samsung

• Intel

TSMC dominates with almost 70% market share, but no major customer wants single-source dependence.

Companies like Nvidia and Amazon need alternatives for supply chain security.

Tan's new stance forces a decision: Commit volume to Intel or lose access to the only viable TSMC alternative.

This creates negotiating power, not weakness.

The U.S. government is another important factor.

Just take a look at America’s AI Action Plan (see highlights below).

Policy clearly supports domestic semiconductor manufacturing.

Intel benefits from subsidies and strategic alignment.

The government can’t let Intel fail.

Intel CEO: Lip-Bu Tan

Tan's track record speaks for itself: At Cadence Design, he delivered >60x return over 14 years!

When he joined Intel, he said:

He isn’t chasing money, he is chasing a legacy.

But recently he also said:

Why would he say that?

Some viewed this as reckless:

• It makes him sound defeated: Has he surrendered already?

• Will this demotivate employees?

• Will it make it harder to recruit fresh talent?

Of course, he didn’t want to give off such a vibe.

I believe Lip Bu is being direct, wants the non-believers to leave, and at the same time he is setting low expectations, which can only help him to over-deliver.

Also, Tan is no stranger to Intel: He spent 2 years on Intel's Board of Directors, so he understands both Intel’s business, and the broader industry very well.

He wouldn’t have taken the job if he didn't feel Intel had a good shot at being successful.

And he signaled this by purchasing $25 million worth of INTC stock at ~$24 per share, 20% higher than the current share price.

Trump Tweet

It will be interesting to see how the market and the company reacts to Trump’s tweet.

If Tan goes, we will have to wait and see who replaces him.

But one thing is for sure: Trump wouldn't be tweeting (X’ing?) this if Intel wasn’t imperative to restoring “America’s Semiconductor Manufacturing” industry, as laid out in America’s AI Action Plan (above).

Intel’s Margin of Safety

Intel holds 70-80% of the client PC market and >50% in servers.

These business segments alone are worth more than Intel’s current ~$20 share price, likely much more.

So, even if foundry investments disappoint, the core business provides investors a significant margin of safety.

Am I Buying?

I am usually not a fan of turnarounds, but the risk-reward profile here is compelling. Intel's core business provides downside protection. The foundry opportunity adds significant upside if successful.

It feels like a “Heads I Win, Tails I Don’t Lose Much” type of situation, so I am willing to put a small marker down.

Here is what I did:

• Bought INTC Dec 17 2027 $35 Strike Calls as a 1% bet in Coffee Can 15

• Turnarounds can take much longer than we expect. So, in Dec 2027, when these options expire, depending on how the turnaround is going, if I want to give this turnaround more time to play out, I may roll the options further out at that time.

As I write this, these options are trading at $2.46/contract. Here is what the profit & loss outcomes look like:

• If Intel <= $37.46 at expiration, we lose 100% of our bet.

• If Intel closes above that, it can generate some very interesting asymmetric outcomes; all that’s required is a little bit of positive news over the next 2 years.

Let’s see what happens.

Are you betting on the turnaround?

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