Incremental CPU demand primarily benefits Intel, driving revenue acceleration and margin improvement; while fundamentally strong enough for a trillion-dollar valuation, the speaker excludes it from their own portfolio.

That's where CPUs are going to come in, and this is the opportunity for Intel as well as AMD.

Intel and AMD also participate on the left there in GPUs and accelerators, but primarily in the CPU space. So this story has also partially played out as well. We are supply constrained in CPUs, especially Intel.

Manufacturing has not been up to snuff for years now, and they do not have enough capacity to meet demand. So all that incremental demand from the hyperscalers is great for their financials.

Who has the most to gain from this list, though, is probably Intel. Because their profit margins are just way behind. They have at least hit the gross margin of 40%. We covered that already, at the last earnings report.

But operating margin at 11%, free cash flow did benefit from some one-time effects. Company has cleaned up its balance sheet quite a bit. Still room for improvement there, but any incremental CPU demand is going to primarily benefit Intel, not just in the revenue growth rate accelerating to twenty-five percent versus just seven and a half percent if you go back to a trailing 12-month basis.

This revenue growth rate should accelerate, and every incremental CPU sale is going to help dig them out of this really large hole they got themselves in over the course of many years.

And if they firm up their manufacturing capacity, there is a lot of room for improvement here. We continue to think Intel could be that next trillion-dollar market cap business after AMD.

This question will probably continue to keep coming up. Why don't we just own Intel? Maybe we will at some point, but I'm not sure it does a whole lot for our portfolio personally.

That's the primary reason why we're not adding it. But maybe you're not overweight semiconductor stocks, and upstream hardware providers due to past decisions, portfolio allocation decisions, and so maybe you need it.

Intel is probably in pretty good shape right now after putting a lot of good work in as of late to fix things.