Intel Corp (INTC)

[walbert]

I don't think we will see any 20nm smartphone production this year. Not sure about 2014 either in any kind of volumes. And this is without any of the cost considerations. We know the economics are getting worse for the foundries with each shrink.

ARM really needed to have volume production on 20nm now in order to stay competitive with Intel.

As the superiority of the Intel roadmap has become more apparent, so has the effect on the stock prices.

Some facts about the differential (ARM stock price minus Intel's stock price):

37 days ago: $25.95
32 days ago: $23.09
27 days ago: $21.32
22 days ago: $19.60
17 days ago: $16.00
12 days ago: $15.56
7 days ago: $13.73
Yesterday: $10.97

If the decline in the differential continues at the same rate as the last 37 days, the stock prices would be the same on July 18th. It might not seem likely but neither did the fifteen dollar decrease over the last 37 days.

What has produced this hugely dramatic change? Increased perception of competition from Intel is quickly eroding ARM's P/E ratio. Why hasn't Intel's P/E gone up dramatically? It would only make sense. Well, you would have to ask the statistically-challenged analysts at Wall Street's largest firms. They seem to be totally unaware that the tipping point and the end of the ARM era have arrived.