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Intel May Have Just 'Burned' $15 Billion On Mobileye

Intel May Have Just 'Burned' $15 Billion On Mobileye

Intel Corporation (NASDAQ: INTC) caught the world off-guard when it announced a $15.3 billion buyout of Mobileye NV (NYSE: MBLY). For Intel investors attempting to determine how good of a deal the company got on its acquisition, Global Equities Research analyst Trip Chowdhry has some bad news.

“We think INTC’s CEO is completely clueless and probably is about to set the world record of burning $15 billion of shareholders money in microseconds,” Chowdhry explained bluntly.

Related Link: Intel's Shaky M&A Track Record

He believes the future of autonomous driving hinges on 3D sensor fusion and machine learning. Chowry sees Mobileye’s camera-focused technology as expendable and when it comes to advancing autonomous driving.

“Basically, INTC has now inherited MBLY’s problems, and we don’t think INTC has the capability to fix MBLY issues,” he adds.

Chowdhry points out that the Mobileye acquisition isn't the first time Intel has made a questionable buyout in recent years. He mentions Windriver Systems (2009), McAfee (2010) and Basis (2014) as three recent Intel takeovers that flopped.

Chowdhry believes the Mobileye buyout adds zero value to Intel’s business and simply foots shareholders with a $15 billion bill.

On the other hand, he argues the buyout could also set the stage for NVIDIA Corporation (NASDAQ: NVDA) multiple expansion in coming months.

Latest Ratings for INTC

Jan 2021DZ BankUpgradesSellHold
Jan 2021NeedhamUpgradesHoldBuy
Jan 2021Cowen & Co.UpgradesMarket PerformOutperform

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