This Beaten-Down Chipmaker Has Found New Life
Editor's note: The technology sector is glamorous, attracting larger-than-life figures and massive valuations. But it's also competitive – and the tables can turn quickly.
In today's Weekend Edition, we're taking a break from our usual fare to share an essay from the free Altimetry Daily Authority e-letter. In it, Joel Litman of our corporate affiliate Altimetry shares how one tech giant beat the odds to revolutionize an industry... and how this left-for-dead company recently bounced back after crashing 70%.
Folks called them traitors...
In 1957, eight men signed their names on a crisp stack of $1 bills in the Redwood Room of the Clift Hotel in San Francisco.
Each man kept a signed bill as a symbol of what they were about to do – commit career suicide.
The men were physicists with advanced degrees. And they were about to walk away from one of the most powerful scientists in America.
You see, their boss, William Shockley, had won a Nobel Prize the previous year for co-inventing the transistor. He'd moved from Bell Labs to a sleepy California orchard town to start a new company called Shockley Semiconductor Laboratory.
At first, it seemed like the future had arrived.
Shockley had formed the startup to commercialize his transistor breakthrough, called the Shockley diode. By replacing vacuum tubes with an all-silicon switch, the diode had the potential to revolutionize electronics.
The best minds in technology had flocked to join him in what was a fledgling industry at the time...
But Shockley was a tyrant. He went so far as to subject his employees to lie-detector tests.
Two of his top engineers, Robert Noyce and Gordon Moore, eventually had enough. They gathered six of their coworkers and wrote a letter to a New York investment firm, looking for an escape.
Shockley was furious. He labeled Noyce, Moore, and their colleagues the "Traitorous Eight."
But junior banker Arthur Rock at New York securities firm Hayden Stone wasn't intimidated.
When the group's letter landed on his desk, Rock saw their potential. He flew to California and made them an offer. They would start their own company with his friend Sherman Fairchild, a science enthusiast with money to burn – he was heir to the IBM fortune.
Their new company was called Fairchild Semiconductor. And it soon gave rise to the most important chipmaker in the world.
You'd recognize its name today. Yet even with such a powerful brand – and its impressive legacy – you might be underestimating this chip stock...
The Birth of the Semiconductor Industry
Fairchild Semiconductor developed important inventions and ideas. Among the so-called "traitors," Noyce and Moore made special contributions...
Noyce invented the silicon integrated circuit, which allowed several electronic components to be placed onto a single piece of material. Previously, these parts had to be wired together by hand.
And Moore established a scientific law that predicted how powerful microchips would be for the next 50 years. (The law still bears his name today.)
With Shockley's tyranny fresh in their minds, they set up their company in a much more egalitarian way. Their nonhierarchical culture became the blueprint for every Silicon Valley startup that followed.
But the company's success bred even more tension...
While Fairchild was a much better place to work, the "Traitorous Eight" didn't own the whole business. Sherman Fairchild and executives loyal to him largely controlled the company. And about a decade after launching the business, Noyce and Moore hadn't earned the riches they thought they deserved.
So in 1968, they became traitors once again. They walked out of Fairchild to start another new company... Intel (INTC).
Intel would build memory chips out of silicon instead of magnetic cores. Arthur Rock, ever the supportive backer, raised $2.5 million in seed funding.
The business dominated the tech industry for decades. It was credited with inventing the first microprocessor.
At its peak in the 1990s, Intel held more than 90% of the global market share for that technology.
Intel Is Now a CHIPS Act Winner
In the past few years, Intel was struggling...
A few recent generations of its computer chips didn't live up to expectations. And Intel has funneled billions of dollars into launching an in-house chipmaking factory.
Until recently, Intel looked like a "fallen angel." In August 2025, its stock was down more than 70% from its pandemic high.
That month, the U.S. government stepped in to stop the bleeding. It announced that it would acquire a 10% stake in Intel by converting an $8.9 billion award from the CHIPS and Science Act into an equity stake.
This move was part of the Trump administration's plan to strengthen domestic chip production. The government wants to ensure that Intel keeps making chips...
And since November 2025, the stock has more than doubled. That said, Intel still has room to run.
You see, last year, leading chipmaker Nvidia (NVDA) purchased $5 billion worth of Intel stock – or about 4% of the company.
That deal gives Intel a big opportunity to profit from the AI data-center market... by providing the chips that will power Nvidia's AI infrastructure.
Along with the U.S. government, Nvidia is giving Intel a major tailwind. It could once again become a dominant force in the computing space.
Regards,
Joel Litman
Editor's note: The computer chips Intel pioneered have become some of the most critical components of the AI build-out. Joel is also tracking a fast-developing chip-factory project in rural Texas... spearheaded by none other than Elon Musk. On Thursday, August 27, at 8 p.m. Eastern time, Joel is going live to share what he has learned – and how it could double your money in 30 days or less. Reserve your virtual spot now.