We have spent much of the past week digging into Intel (and here and here). So we want to end the week, if not on a high note, at a least a constructive one. So below is our proposal for how the company should handle its investor messaging over the next two years.
Our framework for this is based on our investment thesis on the company which holds it needs to solve three problems in sequence – fix manufacturing, fix products, fill up Intel Foundry with customers, in that order. As we see it, the company is in early stages of step 2. This is probably the hardest to solve as evidenced by the latest results. From our reading of the company’s recent remarks, they do not see a recovery in product sales until the middle of 2026. So then the problem to solve is what to say over the next eight (!!!) quarters.
First and foremost, they need to get a true handle on the scope of their problem. At the risk of repeating almost every post we have written about Intel for the past ten years – they do not have a robust internal forecast function. Now is the time for some brutal, bare knuckled internal honesty.
As investor relations (IR) professionals we have always approached the assembling of financial forecasts and guidance as an intelligence gathering exercise. Seasoned IR executives need to operate their own internal spy ring with sources inside all the key functions. We are making it sound overly dramatic, really it involves getting lunch or coffee with colleagues from every department in the company every week. True, the finance team will assemble the official guidance. That is their job, and they are trusted colleagues. But as they say – Trust, but Verify.
The next step is build out a master calendar. We would suggest convening a meeting of representatives from every relevant department – Sales, Operations, Marketing, Finance, R&D, etc. – but not the leaders of all those teams. Instead, we want people who have access to the calendars of those leaders – so chiefs of staff or Technical Assistants. Chart out every possible news event, public engagement, product release, tool update and manufacturing milestone slated to happen in the next two years. And get an honest assessment of the likelihood of those events happening on time. Earnings releases – those are 100%; new product launches – those score somewhere lower.
Combine the revenue forecast with the calendar. Map everything out. Color code good news items and bad news items, Get a sense for how they line up. Once that is done, assert yourself, take control of all those calendars, and completely rewrite them. Everyone will hate this, so this is probably a good time to remind them that you all work for the shareholders and in this room you are the voice of the shareholders. In case of emergency, break glass. And this is an emergency.
The new schedule needs to accomplish things at two levels – the tactical and the strategic. At a tactical level, recognize that human nature hates bad news and tends to overweight it. So use every opportunity to lump all the bad news together – effectively kitchen sink the bad news. Last week’s earnings call would have been a good time to do that, but that is now water under the bridge. Take the good news and dribble it individually over time. Ideally every week, Intel is a big company with a lot happening, so it should be able to at least cobble together a monthly cadence of good news. Over time, this will allow the good news to drown out the bad. To demonstrate this let us ask – when did Intel release the first version of its 18A PDK? This is a major milestone, effectively the public unveiling of their new manufacturing process. Don’t know when that came out? Don’t feel bad, no one else does either because Intel released that very important news in the middle of last week’s earnings press release. No one noticed because the bad news was drowning out the good.
This then brings us to the strategic goal of the new company messaging calendar. Take a long hard look at the company’s financials. When do things really bottom out? This is where having your own intelligence sources in the company will really help. Find the real bottom, not the optimistic one. Not the one written by the employee with resume in hand, one foot out the door, and no interest in rocking the boat. When is the actual bottom. Take that date, and add one quarter, and you have the true point of “as bad as it gets”. (Maybe add two quarters.)
Now craft the company’s new narrative. Intel does not have one know, and desperately needs a new, honest one. What is the story the company is trying to tell. Not a story in the sene of “make believe and fairy tales”, the Street has had enough of those. But story in the sense of a cohesive narrative against which investors can make quantitative judgments. Prior to the true point of “as bad as it gets”, make small promises and beat them, consistently. Do not make big promises or express grand visions. There is only grand vision, the CEO’s, beyond that do not make any more. Until we reach that bottom the goal is to rebuild credibility. Do not worry about the stock price. Do not worry about precise marketing messaging. Do not AI Wash everything. Credibility is what matters most. (We wrote about this a few weeks back, but have reached our quota of self-referential links for this post.) Build out scripts to reflect this message. Project out Q&A sessions. Have executives practice those. Make sure you like all of it, because you are going to have to live with it for the next two years.
The new story has to concede trouble now, but speak to some future goal towards which we are steadily progressing. There is a lot that has to go into constructing that messaging, and if anyone at Intel is interested we are happy to discuss the process in great detail.
We do not believe any of the worst case scenarios for Intel are set in stone. The company still has immense resources and potential. The task now is to convince everyone of that, and that starts with rebuilding credibility one under-promise/over-deliver at a time.
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