Author: The INO.com Team

3-D Printed Homes Could Be the Newest Craze – 3 Stocks Set to Benefit

Posted on by The INO.com Team

The current macroeconomic environment has been less than kind to the housing sector. Demand was already reeling from decades-high inflation, and efforts to contain it have only ended up compounding the misery. In little over a year, the Federal Reserve approved its tenth interest-rate hike to take the Fed funds rate to a target range of 5%-5.25%.

With increasing borrowing costs, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) inched up to 6.91% by the end of May. With consumer debt surpassing $17 trillion during the first quarter of the year to hit a fresh all-time high, mortgage demand dropped to its lowest levels in three months and was accompanied by a decline in existing home sales.

Hence, it is unsurprising that between June 2022 and the end of the previous year, U.S. homeowners have lost $2.3 trillion since June, according to a new report from the real-estate brokerage Redfin.

With non-farm payrolls and private payrolls surpassing expectations to increase by 339,000 and 278,000, respectively, in May to signal persistent tightness in the labor market in a resilient economy, there are doubts about whether the Fed and major central banks around the world would be willing to pause or pivot their monetary stance.

While mortgage rates are expected to keep rising and weighing on the demand for available homes, there are between 1.5 million and 6 million fewer homes in the U.S. than there are households ready to occupy them, which is contributing to housing inflation and rent hikes. With the number of housing units per 1000 people declining over the past decade, the country is undeniably in the middle of surging homelessness.

As a result, the imperative to construct homes cheaper and faster despite labor shortages in construction jobs has been driving the fledgling but exponentially growing practice of 3-D printing them.

The technology, which dates back to the 1980s, uses computer-generated designs to create objects with a nozzle at the end of a robotic arm to extrude layer-upon layer of concrete or other materials like a soft-serve ice cream machine. In the case of 3-D printed homes, the pipe is attached to scaffolding and programmed to move in a specified shape.

3D printing uses recycled materials and uses only as much as is needed without trimming or subtracting excess materials. As a result, this additive manufacturing technique is more eco-friendly and cuts waste by 60%, thereby contributing to a circular economy without sending unused wood, concrete, or glass for window panes to landfills.

3-D printing promises to be an effective workaround to the ongoing labor shortage in the construction industry. While the machine is printing, it requires little supervision or staff on the site, which replaces on-site carpenters wielding hammers and nail guns, prevents injuries, and saves costs on workers’ compensation.

A 2018 study in the academic research publication IOP Science: Materials Science and Engineering, based in the U.K., argues that 3D printing can cut costs by at least 35%.

3-D printed homes are also suitable for effective protection against natural disasters, such as hurricanes, floods, and wildfires. In September 2022, the New York Times reported that a series of 3D-printed homes in Nacajuca, Mexico, have tolerated extreme conditions, including a 7.4-magnitude earthquake.
As a result, proponents see promise in 3D-printed homes providing homeless housing, accessory dwelling units, and rapid reconstruction in disaster zones, such as Ukraine.

Moreover, with the capability of producing complex shapes that can’t be otherwise produced during conventional construction, improvement in aesthetics and mass-customization make 3-D printed homes an architect’s delight. Although printing out a multi-story house is slightly more complicated, there are successful examples, including a 3D-printed apartment building in Germany.

Although the jury is still out on which system is comparatively superior, homebuilders use both on-site (which extrude recycled construction materials to build corduroy-patterned concrete walls right at the building site) and factory-based 3D printers to manufacture homes.

While builders in the United States have been experimenting with 3D printing for several years, a 100-house community in Georgetown, Texas, might someday be looked back on as the place which changed mass housing forever.

Lennar Corporation (LEN), the nation’s second-biggest homebuilder and construction technologies firm ICON, announced in November 2022 that they have begun construction on the 100-home Wolf Ranch development in Georgetown, Texas, with sales scheduled to begin on June 10.
According to the homebuilder's website, starting prices for three- and four-bedroom homes range from $476,000 to $566,000. Homes will range from 1,600 to 2,000 square feet.
According to ICON's CEO Jason Ballard, 3-D printed homes, whose construction costs are expected to keep declining with increasing scale, have “better design, higher strength, higher energy performance and comfort, and increased resiliency.”

If Chris Murphy, chief strategy officer for Oakland-based Mighty Buildings, is to be believed, “There is no way in 10 years we’ll be able to be building like we are today. Even if we didn’t have a massive shortage on the supply side, which we do, we don’t have the labor to continue building as we would want to today, and we have an environmental crisis.”

Given the potential of this technology, the increasing interest is evident from the fact the construction with 3D printers was one of several housing innovations on display during the Pacific Coast Builders Conference held last month in Anaheim.

Given the high growth rate and low penetration, the technology has a long runway ahead as it seeks to transform housing across the world and even beyond it, one layer at a time. Below are a few other stocks that could provide exposure to investors keen to make a long-term bet on this technology.

Stratasys, Ltd. (SSYS)

SSYS offers connected, polymer-based 3D printing systems, related services, consumables, and additive manufacturing (AM) solutions, mainly in Israel, the United States, Germany, Hong Kong, and Japan. The company’s offerings include 3D printers, materials, software, expert services, and on-demand parts production.

Amid unsolicited interests and advances from Nano Dimension Ltd. and 3D Systems Corporation (DDD), on May 25, SSYS announced its entry into a definitive agreement with Desktop Metal, Inc. (DM) whereby the companies will combine in an all-stock transaction valued at approximately $1.8 billion.
By combining the polymer strengths of SSYS with the complementary industrial mass production leadership of DM, the combined entity post-merger is expected to generate $1.1 billion in 2025 revenue, with significant upside potential in a total addressable market of more than $100 billion by 2032.

Proto Labs, Inc. (PRLB)

PRLB digitally manufactures custom prototypes and on-demand production parts, primarily from commercial-grade plastic, metal, and liquid silicone rubber. With a digital model that supports the transition from prototyping to production, the company can support developers and engineers effectively.

Materialise NV (MTLS)

Headquartered in Belgium, MTLS provides software and three-dimensional (3D) printing services. Through quality, reliability, and repeatability, which form the backbone of the 3D printing industry, the company serves and transforms businesses worldwide, including Colombia, Brazil, Australia, Malaysia, China, Japan, Austria, Poland, Germany, and France.

Is eBay (EBAY) the Hottest Buy Ahead of Its New Acquisition?

Posted on by The INO.com Team

Global commerce company eBay Inc. (EBAY) was founded in 1995 as an auction site. Since then, the company has grown into a major online marketplace for peer-to-peer sales operating in 190 markets globally, and has enabled $74 billion of gross merchandise volume in 2022.
Enhancing experience by utilizing the latest technology to empower sellers and buyers and building the trust of customers has been an integral part of the strategy of the online marketplace.

In 2020, EBAY launched its Authenticity Guarantee program, which draws on independent experts to vet and verify items sold on the platform. It was followed up with the debut of an authentication service for luxury handbags that allowed customers to get professional authentication for new and pre-owned handbags from luxury brands such as Saint Laurent, Gucci, and Balenciaga.

Even EBAY’s acquisitions reflect the platform’s unwavering focus on building trust while it increases its penetration in the fast-growing pre-loved segment to differentiate itself from numerous peers focusing on new and largely in-season goods.

As a result, after acquiring marketplace compliance solution 3PM Shield in February 2023 and used-sporting-goods marketplace, SidelineSwap earlier this month, on May 15, EBAY signed a definitive agreement to acquire Certilogo, a provider of AI-powered apparel and fashion goods digital IDs and authentication.

The acquisition is subject to the satisfaction of customary conditions, including regulatory approvals, and is expected to be closed in the third quarter.
Certilogo's platform uses digital technology to tag products with virtual IDs, or “product passports,” that enable traceability and protection against counterfeits. It empowers brands and designers to manage the lifecycle of their garments while providing consumers with a seamless way to confirm authenticity, access reliable information about branded items, and easily activate circular services.

According to Charis Marquez, VP of EBAY, "Certilogo's technology and talented team allows eBay to build on this commitment, establishing eBay as a leader in pre-loved fashion and offering new ways for consumers to connect and engage with brands."

Despite ten consecutive interest-rate hikes by the Federal Reserve in just over a year, the red-hot and decades-high inflation is yet to be sufficiently tamed. Amid the rising cost of living crisis, the appetite for second-hand goods has witnessed phenomenal growth, especially among young shoppers.
Moreover, with increasing awareness and emphasis on sustainable consumption, the stigma surrounding pre-owned goods has all but disappeared while community and circularity have been embraced.

Unsurprisingly, ThredUp’s annual Resale Report showed that the global pre-owned apparel market is set to double by 2027 to $351 billion -- 9 times the growth of the broader retail sector.

However, the concern of ending up with counterfeited goods has fueled the trust deficit and has emerged as a significant roadblock preventing greater adoption. The global market trading in fake goods is worth a staggering $4.5 trillion, with faux luxury merchandise accounting for up to 70 percent ($1.2 trillion), according to a 2019 Harvard Business Report.

Even Washington has expedited its crusade against dupes. It has also received legislative firepower through INFORM Consumers Act, which modernizes consumer protection laws and requires web marketplaces to collect and verify basic business information from sellers before they are permitted to sell online. Moreover, SHOP SAFE Act incentivizes platforms, such as EBAY, to follow best practices for screening and vetting vendors and the products they put up for sale, and forces them to address repeat-counterfeit-sellers.

Given the political emphasis on building and retaining consumer trust, the importance of Certilogo’s assumption can hardly be overstated.
This acquisition would also benefit EBAY’s ecosystem by offering fresh opportunities for small businesses to engage with consumers. By assuring their customers of the legitimacy and sustainability of their products, these businesses could be benefited by improving toplines, driven by repeat purchases from loyal customers.

Lastly, with EBAY’s earnings report last month showing increased traction in the luxury sector, with in-focus categories including watches, handbags, jewelry, and sneakers, its acquisition of Certilogo keeps it well-positioned to keep building momentum.

GameStop (GME) Stock Could Soar on June 7: Here’s What to Watch

Posted on by The INO.com Team

Video game retailer GameStop Corporation (GME), the signature meme stock, had previously been riding some short-term momentum. However, that has since leveled out, and the company has been making progress in right-sizing its business by slashing its inventory levels and reworking its cost structure.
Moreover, the company is undergoing a transitional period by halting its e-commerce efforts and focusing on its brick-and-mortar locations. Furthermore, GME makes changes to its rewards program. Also, GME stock might get a significant boost if there is a ban on short selling.

GME is expected to release its fiscal 2023 first-quarter report on June 7. The quarterly report should show reflect the drastic measures the company has been undertaking to achieve considerable profitability this year.

Let’s discuss the catalysts that could send GME’s stock price to fresh heights:

Favorable Fourth-Quarter Earnings

For the last fiscal year’s fourth quarter, the video game retailer posted its first quarterly profit in two years and surpassed analysts’ expectations for revenue. Its aggressive cost-cutting measures and strong demand for video game hardware in the holiday quarter helped the company become profitable.

For the quarter that ended January 28, 2023, GME reported a profit of $48.20 million, or $0.16 per share, compared to a loss of $147.50 million, or $0.49 a share a year earlier. Adjusted earnings of $1.16 a share beat analysts’ projections of a loss of $0.13 per share.

For the fourth quarter, the company’s net sales dropped slightly to $2.23 billion from $2.25 billion in the year-ago quarter. However, the figure was higher than analysts’ estimates of $2.18 billion.

The video game company had been working vigorously to steer itself back to profitability and partially got there by slashing its inventory levels and costs. Its selling, general, and administrative expenses were $453.40 million for the quarter, or 20.4% of sales, compared to $538.90 million, or 23.9% of sales, in the year-ago period.

Like many retailers, GME struggled with supply chain delays that left the company with a backlog of inventory after it previously tried to meet strong demand. Based on its fourth-quarter balance sheet, the company had $682.90 million in inventory, down from $915 million a year ago.
Furthermore, GME has been trying to improve its cash balance as a part of its revival strategy. The company’s cash and cash equivalents for the quarter were $1.39 billion.

“GameStop is a much healthier business today than it was at the start of 2021,” CEO Matt Furlong said on a call with analysts. “We have a path to full-year profitability.”

Shifted Focus from E-Commerce to Brick-And-Mortar Sales

Ryan Cohen took over GME in 2021, aiming to transform the struggling video game retailer into an e-commerce juggernaut. Unfortunately, the company’s e-commerce sales failed to take off. GME’s losses widened, and Cohen’s new online-sales executives resigned.
As a result, GME began cutting costs. The company canceled plans to build additional warehouses, closed a new e-commerce customer-service center, and laid off many corporate employees hired under the management of Cohen. Also, according to former GME executives and analysts, Cohen miscalculated what customers were prepared to pay through its website and app.

“Quarter after quarter we were unsuccessful with new ventures,” commented Ted Biribin, GME’s former employee. “If something didn't work, senior leadership would go onto something else very quickly.”

GME’s CEO, Matt Furlong, stated in an internal memo last year, “Our stores, in particular, are a differentiator that will help us maintain direct connectivity to customers and position us to have localized order fulfillment capabilities across more geographies. While we continue evolving our ecommerce and digital asset offerings, our store fleet will remain critical to GameStop’s value proposition.”

GameStop is poised for solid growth as the company has stopped focusing on e-commerce sales. Consequently, the company can now provide more support for its 4,400 brick-and-mortar stores. GME also introduced an initiative to motivate the company’s staff.

Last year, the company announced an “improved compensation” scheme for its brick-and-mortar video game store’s most senior employees. For Assistant Store Leaders and Senior Guest Advisers, the compensation comes as an undisclosed rise in their hourly pay. For Store Leaders, it comes in the form of $21,000 worth of GME stock (vested for three years) on top of their regular pay, coupled with “the opportunity to earn additional compensation every quarter by hitting goals for performance-based equity grants.”

GME’s focus on physical stores resulted in the company reporting a quarterly profit for the first time in two years. For the full fiscal year 2022, expenses were reduced by more than $100 million.

GME’s Membership Program Getting a Huge Makeover

GME offers incentives to members of its rewards program to secure customer loyalty. To that end, the company is seemingly making significant changes to its customer loyalty program. The existing PowerUp Rewards membership will have its name changed to GameStop Pro, with the price going up from $15 per year to $25.

GameStop Pro will access some special perks through this new program. Among other incentives, members will get bigger discounts on collectibles, pre-owned games, GameStop brand gear, clearance items, and more. GameStop Pro is expected to roll out on June 27, with existing memberships being phased out as they come up for renewal.

GME’s revised customer loyalty program could enhance profitability and growth for the company.

Prohibition on Short Selling Could Send GME To New Highs

The practice of short selling has come under increased scrutiny amid the recent banking turmoil. Short selling is a well-known strategy in which financial traders bet that the price of a stock will go down. Short sellers largely profited from the banking crisis by borrowing shares they expected to fall and repaying the loan for less later to pocket the difference.

In March 2023, Wachtell, Lipton, Rosen & Katz, a law firm known for representing large companies in mergers and against attacks from hedge funds, called on U.S. securities regulators to restrict short sales on financial institutions. Also, the calls from Capitol Hill and elsewhere to prohibit short-selling have gotten louder lately.

With more regulators and lawmakers ramping up their calls for an outright ban on short selling, investors should prepare for potential legal changes. As traders anticipate this possibility, GME stock could get squeezed higher quickly. The r/WallStreetBets crowd might start a massive short squeeze in anticipation of a potential short-selling ban.

How Should Investors Approach the Stock

The stock has risen 33.5% year-to-date, beating the 11.5% gain in the S&P 500 index. Moreover, shares of GME have gained 20.1% over the past month and 32.1% over the past three months.

As investors think the company can pull off a successful business turnaround, GME stock has risen recently. The video game retailer has essentially pivoted its focus to brick-and-mortar sales instead of e-commerce sales with an eye on improving profitability. The shift already resulted in its first quarterly profit in over two years.

Moreover, the revised customer loyalty program, GameStop Pro, is a smart move that could bolster the company’s top-line results in 2023. At the same time, a potential ban on short selling could prompt a massive final squeeze for GME stock. Now, all eyes are on GME’s first-quarter fiscal 2023 earnings, to be released on June 7, after the market close.

Over the past few years, stock traders and price chasers have targeted GME, but sensible investors should avoid emotional trades and monitor the company’s financial and operational progress.

Investors could also keep tabs on the buying activity of GME’s insiders. After all, if the company’s insiders express their confidence through share purchases, that is probably a positive sign for the stock. Director Larry Cheng recently purchased 5,000 shares of GME worth about $114,000. Following this purchase, Cheng now owns a total of 44,088 shares.

While many strong forces propel GME, investing in the stock still involves a high level of risk. Investors should continue to expect GME stock to remain volatile (with a 24-month beta of 1.90), and it is not appropriate to pour their entire account into this one stock.
Though it is advisable to take a small position in GME stock, as it may be on the cusp of a breakout, and the share price is likely to shoot higher in the near future.

Is Ford Motor (F) the New Tesla (TSLA)?

Posted on by The INO.com Team

More than a year has passed since an announcement on April 26, 2022, by Ford Motor Company (F) CEO Jim Farley, regarding the company’s intent to challenge Tesla, Inc. (T) as the global EV leader.

Since then, the Detroit automaker has made huge strides in the electric mobility space. It has pipped TSLA to the pickup segment by beginning production of its F-150 Lightning and benchmarked the Model Y for its Mustang Mach-E crossover. While TSLA is still the runaway leader, F notched 61,575 fully-electric vehicle sales to emerge as the challenger in the U.S., something the legacy automaker planned to achieve by mid-decade.

Since both rivals are expected to battle it out for a greater share of the electric-mobility pie, it is understandable why an unexpected announcement by the CEO of both companies to join hands to enlarge the pie took the industry and markets by pleasant surprise.

On Thursday, May 25, during a live audio discussion on Twitter Spaces, Jim Farley and Elon Musk announced an agreement on charging initiatives for Ford’s current and future electric vehicles. Under the agreement, current Ford owners will be granted access to more than 12,000 Tesla Superchargers across the U.S. and Canada starting early next year.

Moreover, the next generation of Ford EVs, expected by mid-decade, will include TSLA’s charging plug, enabling owners to charge their vehicles at Tesla Superchargers without an adapter while using Ford’s software.
A separate Ford spokesman later added that pricing for charging “will be competitive in the marketplace.” The companies will disclose further details closer to a launch date, anticipated in 2024.

Following this announcement, which makes F among the first automakers to explicitly tie into the TSLA network, the former’s stock rose by 6.2% on May 26, closing at $12.09 per share, while the latter’s shares also climbed by 4.7%, ending the week at $193.17.
In this article, we elaborate on why the optimism makes sense.

Firstly, as F is ramping up its production to double its EV capacity this year and looks on course to get to two million in a couple of years, with public charging of electric vehicles being a major concern for potential buyers, charging infrastructure is going to be critical for the company in order to ensure that it delivers a superior after-purchase experience to its customers.

TSLA is the only automaker that has successfully built out its own network of fast chargers, which gives the EV leader an edge over its competitors, whose partnerships with third-party companies have left much room for improvement in reliability and reach.
However, with the announcement, F has managed to more than double its existing capacity of 10,000 fast chargers with 12,000 well-located TSLA Superchargers. Moreover, leveraging TSLA’s superior NACS charging technology is F’s attempt to ensure that it is on what Elon Musk has described as “equal footing” in its completion with the incumbent.

Secondly, opening up 12,000 Superchargers in its network of currently 45,000 connectors worldwide at 4,947 Supercharger Stations could benefit TSLA in multiple ways.

White House officials announced in February that TSLA has committed to open up 7,500 of its charging stations by the end of 2024 to non-Tesla EV drivers. The agreement with F would help the company make progress on that front.

By diversifying from being a competitor to doubling up as an infrastructure provider, the EV leader has hedged its bets to benefit from the increasing presence of legacy automakers in the electric mobility space.

While the company is expected to dominate EV sales in the foreseeable future, the revenue from its Supercharging stations, which is included under the “services and other” segment, is also expected to witness remarkable growth due to increased network utilization by non-Tesla EV drivers.

Lastly, but perhaps most importantly, this partnership could be the initiation of the strategic masterstroke that impacts the entire EV ecosystem. As discussed earlier, while TSLA uses NACS charging technology, the rest of the industry has adopted relatively-slower CCS charging.

With two-leading EV manufacturers joining hands and F being ‘totally committed’ to a single U.S. charging protocol that includes the Tesla plug port, EV strategies of other auto manufacturers, such as GM and STLA, could come under increased pressure.

According to Jim Farley, the others “are going to have a big choice to make. Do they want to have fast charging for customers? Or do they want to stick to their standard and have less charging?”

In this context, it wouldn’t be surprising if Musk’s statement, “Working with Ford, and perhaps others, can make it the North American standard, I think that consumers will be all better for it,” turns out to be the beginning of yet another victory lap for the illustrious CEO.

Battle for AI Supremacy: Analyzing NVIDIA (NVDA) and Intel (INTC)

Posted on by The INO.com Team

Being in the semiconductor business is like owning a plantation of Chinese bamboo. Small incremental steps that often seem too insignificant and inconsequential, especially to unsuspecting investment research analysts like us, compound over time to reach an inflection point and give a company’s stock the kind of moonshot like the one that NVIDIA Corporation (NVDA) experienced after its earnings release on May 24.

The Santa Clara-based graphics chip maker has stolen the thunder over the past week by becoming the first semiconductor company to hit a valuation of $1 trillion, albeit briefly, boosted by the interest in AI and its launch of new partnerships.

However, the seeds of this breakout were sown by the company, which went public in 1999 and occasionally flirted with bankruptcy, back in 2006 when the company took the first steps to raise accelerated computing to a whole new level by making its foray into parallel (and consequently faster) computing with the release of a software toolkit called CUDA.

Parallel computing was ideal for artificial neural networks' deep (machine) learning. Hence the kit was first used in AlexNet, a revolutionary AI then. This set off a chain reaction that has propelled the company to the center stage of the AI boom.
Fast-forward to today, and NVDA is reaping the rewards for all that invisible work as its A100 chips, which are powering LLMs like ChatGPT, have become indispensable for Silicon Valley tech giants.

To put things into context, the supercomputer behind OpenAI’s ChatGPT needed 10,000 of Nvidia’s famous chips. With each chip costing $10,000, a single algorithm that’s fast becoming ubiquitous is powered by semiconductors worth $100 million.
Now let’s pivot to the company that put Silicon in Silicon Valley. Intel Corporation (INTC), the pioneer of modern computing, has fallen behind the law attributed to one of its founders, Gordon Moore.

The company, going through a turbulent phase, reported its largest quarterly loss in history in the first three months of 2023, with revenue down 36% and a 133% decline in earnings per share compared to the same period last year. Moreover, its expectations for the second quarter also fell short of analyst expectations.

“We didn’t get into this mud hole because everything was going great,” was the honest assessment by CEO Pat Gelsinger, who also took a pay cut along with other executives as INTC also kicked off cost-cutting measures as it is hustling to catch up to, and hopefully surpass, its more accomplished rivals such as TSMC and Samsung.

However, in its long and eventful history, the company has been here before. The memory chip pioneer, which saw its market share eroding away to oblivion, made a drastic pivot to microprocessors in 1984 at the onset of the PC boom, only to miss the bus on smartphones in 2011 by turning down an early offer from Apple Inc. (AAPL).

Road Ahead

The optimism surrounding NVDA is justified. With the company’s presence in data centers, cloud computing, and AI, its chips are making their way into self-driving cars, engines that enable the creation of digital twins with omniverse that could be used to run simulations and train AI algorithms for various applications.

Even its previously unsuccessful Tegra processors have found a new lease of life in logistics robots and driverless cars.
However, the seeds of chaos are sown at times of unbridled optimism and willful suspension of disbelief. At the risk of spoiling the mood, at the end of the day, the company is primarily a chip designer that is committed to remaining a fabless chip designer to keep capital expenditure low.
Hence, NVDA faces risks of backward integration by companies such as Apple Inc. (AAPL) and Tesla Inc. (TSLA) with the capability to develop the intellectual capital to design their own chips.

Moreover, almost all of the manufacturing has been outsourced to Taiwan Semiconductor Manufacturing Company Ltd. (TSM), which has yet to diversify significantly outside Taiwan and has become the bone of contention between the two leading superpowers.
In contrast, INTC is an Integrated Device Manufacturer (IDM) which designs as well as manufactures semiconductor chips in 15 fabs worldwide and assembles and tests them in Vietnam, Malaysia, Costa Rica, China, and the United States. The company is in the middle of a turnaround and focused on reinforcing its moat by doubling down on the Fab business.

With the aim to surpass the chip-making capabilities of both TSMC and Samsung, INTC is pursuing an aggressive IDM 2.0 road map with new manufacturing facilities in Oregon, New Mexico, Arizona, Ireland, and Israel in the pipeline.
Among those, the new facilities in Arizona would not just be manufacturing chips for the company but also for customers such as Amazon, Qualcomm, and others as part of Intel Foundry Services. While the company still depends on TSMC for 5nm chips that are used for AI applications, it is aiming to take a quantum leap in that direction with even smaller 18 A chips.

The company’s efforts are also receiving much-needed political encouragement in the form of the Chips and Science Act, which is aimed at on-shoring and de-risking semiconductor manufacturing in the interest of national security.

Bottom Line

After weighing the pros and cons of both semiconductor stocks, we conclude that NVDA’s and INTC’s prospective risk-adjusted returns are not as high or as low as their respective stock prices suggest.