Analyst Predicts Number He Made Up Will Happen Later

Intel stock sits at $22. Melius Research says it hits $200 in two years. That's a 809% gain. Someone wrote this down and sent it to reporters.

The thesis rests on lucrative deals with top chipmakers. Intel makes chips. The top chipmakers also make chips. Intel will strike deals with its competitors to make chips for its competitors while competing with those same competitors. This is called a business model. Wall Street loves it.

Two years is the perfect timeline for a price target. Long enough that you forget who said it. Short enough that it sounds like analysis instead of a guess. If Intel hits $200, the analyst takes a victory lap. If it doesn't, he upgrades Microsoft and moves on. Nobody keeps score.

Retail traders saw the headline. They bought calls. They texted their cousins. They posted rocket emojis in Discord. They did not ask which lucrative deals. They did not ask why competitors would pay Intel to make chips when TSMC exists. They did not ask why Intel's foundry business lost $7 billion last year if the deals were lucrative. They just bought.

The stock jumped 4% on the news. Someone at Melius owns Intel. Someone at Melius needed Intel to go up. Someone at Melius typed $200 into a Bloomberg terminal and hit send. This is legal.

Phil's chart says Intel breaks resistance at $24 or dies at $20. The fundamentals don't matter. The deals don't matter. The analyst's reputation doesn't matter. What matters is whether enough idiots believe the number before the call options expire worthless.

Prediction: Intel closes the week at $21. The analyst gets quoted in six more articles. Your cousin loses $1,400.

Photo by Brecht Corbeel on Unsplash