Intel is having a meme storage moment. 4 retail investors explain why they are betting on the chip maker.

• Intel has generated a lot of retail talk and stock buying in recent days.

• The chipmaker’s stock has fallen this year, and a poorly timed investment has Reddit users tickled.

• Four members of Reddit’s WallStreetBets subreddit explain why they’re betting big on Intel.

GameStop. Bath in bed and beyond. Intelligence?

The microchip maker isn’t an obvious choice to become the next big meme stock, but it’s generating a lot of buzz on Reddit’s WallStreetBets subreddit.

Early Thursday, Intel ranked fifth on Swaggy Stocks’ list of trending stocks on WSB over the past week and sixth on Ape Wisdom’s list over the past 24 hours.

Retail investors also piled money into the chip maker. Vanda Research’s retail flow tracker shows it was the fifth most popular stock in the five trading days to Aug. 13, attracting $162 million in net retail buying.

Intel trailed only Nvidia ($1.4 billion), AMD ($259 million), Palantir ($189 million), and adze ($164 million). He surpassed people like Apple ($155 million) and Microsoft ($147 million).

Vanda analysts noted that overall net retail purchases rose this month, “well above even our most optimistic expectations,” as investors capitalized on “the biggest decline since April.” Demand has cooled since early August, but purchases continue to approach a 12-month high of $1.4 billion a day, analysts added.

Why Intel?

Intel shares have fallen about 60% this year to about $20, the lowest level in more than a decade. On Aug. 2, it fell as much as 30 percent — its biggest one-day drop in 30 years — after Intel’s second-quarter earnings revealed plans to lay off about 15,000 jobs, or 15 percent of its workforce. total work, and led to a decrease. earnings than Wall Street expected.

The company’s net assets were valued at $115 billion at the end of June, about $30 billion more than its current market capitalization.

Meme stock investors are known for finding runaway stocks to buy in droves, but they also like to buy into funny stories and support colorful characters like GameStop guru Keith “Roaring Kitty” Gill.

In Intel’s case, some of the excitement seems to have been sparked by a WSB post by u/Sad_Nefariousness10. In an Aug. 1 post, the user claimed to have received an $800,000 inheritance from their grandmother, invested $700,000 of that in Intel that day, and planned to hold the chip stock for at least 10 years.

It appears to have been a bleakly-timed purchase, given that Intel fell more than a quarter after the market closed for the day. The user posted an update the next day showing that their investment was down $204,000 on paper to under $500,000, but still planned to hold onto the stock for the next decade. BI could not confirm the veracity of the posts.

The story continues

The user’s misadventure made the forum a laughing stock, but apparently prompted others to get in on the joke by investing large sums in Intel stock.

BI spoke to four Reddit users who claimed in recent posts on WSB that they invested in Intel stock. BI has not verified their claims, so they should be treated with skepticism. Here are their comments about Intel, slightly edited for length and clarity:

1. u/Smallmem

“I invest heavily in Intel primarily because it’s a cheap stock that trades basically at book value, and investing in it is a bet against international trade; if the US decides not to rely entirely on Taiwan Semiconductor, which I think it must, Intel Shares will rise rapidly.

“Intel Grandma’s post was an incredible post because of the incredible timing. You have someone invest $700,000 of their inheritance in stocks, not even options, and by the end of the day it’s down $200,000; it’s hilarious And framing it as his grandmother’s legacy proved even funnier.

“WallStreetBets has always been about people gambling large amounts of stupid money on stupid investments, and it’s even funnier when it’s on a company that’s currently failing like Intel. Personally, I posted myself buying Intel because I felt for the kid; he made a gigantic play as Intel. his first investment and immediately lost a lot of money.

“While most WallStreetBets (myself included) are throwing money in the trash, hoping to win millions and make a funny Reddit post when we lose, he was planning to set and forget INTC for 10 years! It was a terribly unfortunate moment. He still holds INTC though, which shows his commitment. I wish him the best.”

u/Smallmem told BI that he is 22 years old, studying for a master’s degree in computer science, and owns about $20,000 in Intel stock. He said Intel is unlikely to take off like other meme stocks because its market cap is too high and there are fewer casual investors who are bored and stuck at home than during the pandemic. But he suggested that the buzz around the stock could prompt professional investors to buy, pushing up its price.

2. u/randomGov

“I can buy a company 1) strategically important nationally, 2) with a huge moat (only a few can spend over 100 billion to compete), 3) for less than TANGIBLE book value, 4) that spent more than the current market cap of capital in fabs (good chance of significant return in the future), 5) creating things (chips) on which the future is built (AI, EVs and other technologies), 6) with great chance to be a technology leader.”

u/randomGOV POSTED an unconfirmed screenshot of his portfolio showing a $227,000 investment in Intel.

3. u/wedge754

“I think it has the potential to become a meme stock, it’s just not there yet. I think it’s oversold and people forget how broad Intel’s market really is. Intel is the largest chipmaker in the US, I don’t see them going down without Most importantly, I think a new CEO is on the horizon.

“I’ve been looking at Intel since the COVID/AI boom and how Intel has basically stagnated. The recent big drop felt like the time to get in – hopefully the negative attention is putting pressure on them to restructure. The meme posts are just the icing on the cake.”

u/wedge754 told BI that he invested about $25,000 in Intel.

4. dc_chilling17

“I’m betting big because the company’s prospects are very bright. The market is putting too much weight on margin pressure, which is a direct result of their increased investment for their foundry business. When the market realizes that Intel is going to be the Fedex to TSMC’s UPS, and that margins are squeezed due to a perfect storm of events versus a flaw in the business itself, things will turn around.

“They’re going to IPO Altera for less than $30 billion. Mobileye is probably worth $15-20 billion a year from now. Give it up, you’re telling me that one of the world’s largest chip companies by revenue, with a manufacturing monopoly over the West, is worth $30-40 billion?

“Meanwhile, AMD, their little brother with a fraction of the market share and no factories is worth $220 billion? It’s just a market dislocation. I bought Exxon at $39, Meta at $89 and now Intel at $19. The play is obvious. The market will wake up to it.”

dc_chilling17 told BI that he has a $1.1 million position in Intel.

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