Intel (INTC -2.15%) is down right now, but can it make a comeback? In this clip from "The M&A Show" on Motley Fool Live, recorded on April 1, Motley Fool contributor Travis Hoium discusses the steps the company is taking to be a growth company with two distinct businesses.
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Travis Hoium: It's a turnaround play. It's not a guaranteed company. They're in decline. I think the semiconductor business is really hard to wrap your head around as I try to learn more and more about it because the decisions you make 5-10 years ago are reaching fruition now. If you look at their past performance, it looks really good. It looks like a value stock.
Jason Hall: It's a ton of momentum.
Hoium: If you look at where the momentum is, it's not in Intel's favor. Pat Gelsinger is doing a lot of things to try to turn that around in the hopes that in five years from now, they can be a growth company with these two distinct businesses, one as a foundry services, and one designing their own chips. I think the acquisition, like we talked about, is a deal that could try to add value to probably that chip-designing side in the data centers, where they do have a leg up on the competition. They probably have some stickiness, especially with some of their bigger buyers. I like their chances. It seems a little bit to me like airlines, where there's only so many big players, but there's only so many chip giants. Right now, Taiwan Semiconductor (TSM 1.27%) has a huge leg up. They have a strategic advantage, they have all the big buyers, they have the best technology. But, often times, these things go like this. Intel's down right now. The question is, can they make that comeback? They're desperate enough. I like the position that they're in from a financial perspective because, if they succeed, it could be multiples from where it is in 5-10 years.