Intel: May Unlock Value by Spinning Off Programmable Solutions Stake; Maintain $35 Fair Value

We maintain our $35 fair value estimate for no-moat Intel as the company announced its intention to run its programmable solutions group as a stand-alone business that will report separate segment financial results in 2024 and, more importantly, will be brought to an IPO in the next two to three years. Intel may also bring private investors into the PSG spinoff. The move resembles Intel’s successful spinoff of shares of Mobileye. We like the move for Intel as it will raise capital for the company and narrow its focus on achieving chip manufacturing process leadership. The shares were up about 2% on the news, and we view them as fairly valued.