Insiders Are Buying Intel (INTC) and Opendoor (OPEN)

Intel (INTC) CEO Lip-Bu Tan recently purchased $10 million worth of INTC shares at $95 per share, just days after the company completed a $20 billion secondary offering. Intel's Q2 revenue rose 25% year-over-year, with margins increasing to approximately 42%. The AI segment grew by 59%, and foundry revenue climbed 31%. Analyst Matt Bryson of Wedbush believes Intel's advanced packaging technology, EMIB, could open doors to TPU orders from Google, potentially signaling a new catalyst for the stock.

However, the bear case intensifies, as server revenue growth is tied to price, not volume. Client computing segment prices grew by 27% while volumes dropped by 8%. A significant portion of the recent Foundry revenue was due to Intel manufacturing chips for itself, while external customer revenue totaled around $293 million. Intel's non-GAAP trailing P/E is 88.70, a 246% premium compared to the sector median of 25.65.

Forward P/E is 63.91, a 169% premium over the sector median of 23.77. EV/Sales runs 8.64 forward, a 138% premium over the sector median of 3.64. Kaz Nejatian, Opendoor Technologies (OPEN) CEO, bought 27,625 shares of the company after Q2 results missed revenue and earnings expectations. Opendoor's Q2 loss per share was wider than anticipated, and adjusted EBITDA turned negative.

The company sold 2,339 homes, below consensus and far fewer than the 4,299 homes sold in the same period last year. Opendoor plans to gain licenses in more states, and bullish investors argue the stock could rebound as Zillow exited the iBuying business in 2021, leaving Opendoor as one of the few major players. Bulls also point to eventual improvements in the housing market, which would boost transaction volume.

OPEN trades at a 0.91 price-to-sales ratio, an 81% discount to the sector median of 4.91. The net long debt to assets ratio is 5.91%, compared to the 39.94% sector median. However, the stock trades at a 3.56 price-to-book ratio, a 114% premium over the sector median of 1.67, raising caution. While the report acknowledges the risk and potential of OPEN, it believes AI stocks offer greater promise for higher returns, with one mentioned holding 10,000% upside potential.