Prof G Markets: Will Boeing and Intel Recover? — ft. Aswath Damodaran
Nov 1, 2024
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A riveting analysis of Intel and Boeing reveals contrasting futures. While Intel is poised for recovery in the competitive chip market, Boeing faces a daunting reputation crisis that threatens its viability. Insights on major companies like Nike, Disney, and Tesla provide an in-depth understanding of current market dynamics. The discussion is packed with valuable perspectives on the challenges and opportunities these industry giants are navigating.
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Quick takeaways
Intel's attempts to reclaim its dominance in chip manufacturing reveal both overreach challenges and potential advantages from U.S. subsidies.
Boeing's tarnished reputation in the aerospace industry illustrates the severe risks of investing in a company struggling for consumer trust.
Deep dives
The Challenges Facing Intel
Intel's struggles in recent years are largely attributed to its attempt to reclaim its dominance in the tech industry, particularly in chip manufacturing. The company has made significant investments to compete with industry leaders like TSMC and NVIDIA, yet these efforts have led to overreach, often referred to as 'me-tooism on steroids.' Despite its challenges, Intel still has advantages that could facilitate a revival, such as benefiting from U.S. subsidies aimed at boosting domestic chip production. Although the market has reacted negatively to Intel's stock, falling under $20 per share, the potential for moderate growth remains, suggesting that the stock could be a worthwhile investment for those willing to overlook its current setbacks.
Boeing's Diminished Reputation
Boeing's reputation has suffered immensely over the past two decades, leading to a precarious standing in the aerospace industry. The company, once a leader recognized for its engineering excellence, now finds itself in survival mode, having damaged its credibility to the point that its safety is questioned by consumers. Current discussions suggest that Boeing may soon sell off its space division, indicating significant internal challenges and a need to shed assets to stay afloat. Given the gravity of its reputation crisis, investing in Boeing presents considerable risks, as trust in the brand has been irreparably harmed, making any recovery exceedingly difficult.