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- 📈 Intel's $200B Split Decision
📈 Intel's $200B Split Decision
Elon says Grok3 to be unveiled today, Uber sues DoorDash, Insignia $2B takeover bids due, Tenecent shares jump, Broadcom and TSMC look into Intel split
Evelio Silvera
February 17, 2025
Good morning.
⚡ The Fast Five → Elon says Grok3 to be unveiled today, Uber sues DoorDash, Insignia $2B takeover bids due, Tenecent shares jump, Broadcom and TSMC look into Intel split
🔎 Market Trends → Wall Street ends mixed; Nvidia lifts Nasdaq; US Futures Fall after Poor Data
And now…
⏱️ Your 5-minute briefing for Monday, February 17, 2025:
MARKET BRIEF
Before the Open
As of market close 02/14/2025.
Pre-Market
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Fear & Greed
Markets in Review
Stocks Hold Firm as Tech Shines, Traders Weigh Economic Data
The Nasdaq climbed 0.4% to 20,026.8, while the S&P 500 was flat at 6,114.6. The Dow slipped 0.4% to 44,546.1 as investors balanced soft retail sales with strong industrial production. Tech led the gainers, while consumer staples and health care lagged.
The Big Picture:
A tale of two economies: Retail sales fell more than expected in January, weighed down by weak auto demand. But industrial production surged, bolstered by gains in aerospace and utilities.
Despite the slowdown in consumer spending, the labor market remains resilient, balance sheets are strong, and borrowing costs are lower than a year ago—all factors that should sustain economic momentum. The looming threat of tariffs adds uncertainty, but Oxford Economics says it’s reason to adjust, not abandon, bullish forecasts.
Bond markets responded to the mixed signals, with the 10-year Treasury yield slipping 4.7 basis points to 4.48%, while the 2-year yield dropped 4.8 basis points to 4.26%. Meanwhile, West Texas Intermediate crude dipped 0.9% to $70.66 per barrel.
Market Movers:
Applied Materials (AMAT) slid 8.2%, leading Nasdaq laggards. The semiconductor equipment maker forecast weaker Q2 revenue as U.S. export restrictions on China take a toll.
GoDaddy (GDDY) tumbled 14%, the worst S&P 500 performer, after its Q4 earnings fell short of expectations.
Airbnb (ABNB) surged 15%, the top gainer on the S&P 500 and Nasdaq, as strong demand fueled a bigger-than-expected profit.
Wynn Resorts (WYNN) jumped 10% after beating Q4 earnings expectations, riding a wave of post-pandemic travel demand.
What They’re Saying:
"Despite the monthly vagaries of the data, factory conditions are trending in the right direction," Oxford Economics noted.
WHAT WE’RE WATCHING
Events
There are no events scheduled for today.
Earnings Reports
Today: The Coca-Cola Company, BP, DoorDash, Marriott International, AIG, Humana, Zillow, S&P Global, Supermicro, FIS
Tomorrow: CVS Health, Robinhood, Reddit, Kraft Heinz, Rollins, Cisco, CME Group, Barrick
MARKET BRIEF
Leading News
The Great Intel Split: How a Tech Icon's Breakup Could Unlock Hidden Value
Why it matters:
The potential breakup of Intel ($INTC) could reshape the semiconductor landscape and create a rare opportunity for investors to capitalize on the sum-of-parts value in America's semiconductor pioneer.
Zoom Out:
After decades of maintaining its "integrated device manufacturer" model — think vertically integrated chip production from design to manufacturing — Intel finds itself at a crossroads. The company's stock has become what Benjamin Graham might call a "cigar butt with a few good puffs left," but this corporate drama suggests there might be more value than meets the eye.
Like a master chess player forced to sacrifice their queen, Intel's board appears ready to split the company's design and manufacturing operations — a move that could unleash value trapped by the conglomerate discount.
Key Insights:
Design division in play: Broadcom ($AVGO) is eyeing Intel's chip design business, which, freed from its manufacturing constraints, could become a nimble competitor in the AI chip race. Think of it as letting a talented architect work with any construction company, rather than being tied to one builder.
Manufacturing renaissance: TSMC's interest in Intel's fabs comes with a plot twist — the Trump administration's involvement suggests this could become a national security chess piece, potentially attracting premium valuations for these assets.
AI angle: The restructuring could position both resulting companies to better compete in the AI chip market, where Nvidia currently reigns supreme. Intel's design team, unburdened by manufacturing costs, could focus on next-gen AI architectures.
Market Pulse:
"The market often misses the forest for the trees," says a veteran semiconductor analyst. "Intel's parts could be worth significantly more than the whole."
Bull’s Take:
For patient investors, this could be a classic value unlock story. While the market sees a struggling giant, smart money might find two specialized companies better positioned for the AI age, each with its own competitive advantages and growth trajectories.
Headlines
Diamondback Nears Permian Deal to Buy Shale Producer Double Eagle (link)
Tencent Shares Jump as Company Integrates DeepSeek in WeChat (link)
Inside Bilt’s Disruptive Play (link)
Insignia Bids Due Month-End for $2 Billion Takeover Battle (link)
Uber sues DoorDash, accusing its food delivery rival of inflating costs and anti-competitive business practices (link)
Elon Musk says xAI's Grok 3 chatbot to be unveiled on Monday (link)
CRYPTO
Fear & Greed
Headlines
DAILY SHARE
On the Socials
*Hat-tip to RampCapitalLLC