The Probable And The Possible
While speculating on any particular stock to be bought out at a significant premium, is always a low possibility event, taking a position in an undervalued and or a turnaround play for a longer term trade is a higher probability outcome.
I alluded to this trade recently. Intel has been an underperformer for years. They are in the end phase of a major turnaround that will bear fruit in 2025. At the $30 level the downside is minimal and the upside is around 100%.
At worst, during this upcoming bear phase in the stock market for the second half of 2024, INTC is likely to outperform to the upside. The lower percentage outcome is that someone, most likely Nvidia, buys them out.
After their upcoming 10-1 split NVDA is likely to trade around 120. Using a .6 ratio per NVDA share for each INTC share would provide an approximate price of $72 for INTC. That would represent only about 10 percent dilution to NVDA, to now own one of the largest chip plant manufacturers. They go from owning no mfg. facilities to having production facilities globally and away from the Chinese threat overshadowing Taiwan semiconductor facilities.
If no deal occurs, Intel is likely a 50-100% performer over the next 6-18 months. If a deal does occur, those gains would come in a matter of weeks or months. (This is not investment advice, just my opinion.)