The foundations of Intel were laid in 1968. Ever since the company came into being, it has established itself as the market leader in microprocessor chip manufacturing. The company also manufactures motherboard chipsets, graphic cards, and other hardware related to computing and communication.
Intel’s stock took a significant hit in 2021 and continued a downtrend till 2023. However, plunges create opportunities, and Intel’s slow recovery is showing bright signs.
Highlights and Key Takeaways
- Intel’s financials have taken a hit due to fierce competition, shrinking product demand in its most important market sectors, and challenges in keeping up with the pace of innovation.
- The company has made radical changes in its manufacturing processes to tackle issues with the supply chain, including its upcoming foundry business.
- Intel’s move to normalize “AI PCs” is a bet placed at the right time in the rebounding PC market, which might pay off in the years to come.
Understanding Intel as an Investment
Intel Corporation is a leading American multinational technology company that designs and manufactures a wide range of products for various industries. As an investor, understanding Intel’s financial performance, market share, and innovation strategies is crucial to making informed investment decisions. In this context, this article discusses Intel as an investment and provides insights into its current position in the market.
Why Invest in Intel?
After its decline from the 2021 peak of $68.49, Intel’s stock price showed a gradual upward trend increasing by 90.1% in 2023. While not a full recovery to its previous highs, the positive value growth in recent quarters is encouraging. And with their new line of AI-friendly processors, the revenue is expected to improve in the years to come.
Intel has also made aggressive investments to catch up with its competition and is now set to build its own foundry business. This further settles their supply chain issues and creates an opportunity for them to become a mass producer of chips for others. The foundry market is over $100 billion and is expected to double in years to come. This part of the business is expected to create a huge revenue stream for Intel once established.
Intel has also launched its line of high-performance laptop processors called Meteor Lake, which is expected to bring the term “AI PCs” to life. The processors are optimized for scheduling and battery life and come in a thin computer tile form.
With all the expansion plans, Intel looks set for the next financial year to bring in new areas of revenue and bring innovation to their current products.
Risks Associated With Investing in Intel
Although the Intel stock is slowly regaining momentum, the company has been reporting declining revenues for some time. The company has lost significant market share to its competitors like AMD, and its bet on AI creates a long-term opportunity that might not pay off in the short term.
Another risk to keep an eye on is the cash flow. With a negative cash flow of $20 billion in the first nine months of 2023, Intel’s financials raise concerns. The significant outflow is partly due to profitability issues in the PC market, increasing liabilities, and revamping of the chip manufacturing process to increase competitiveness. The debt has increased to $49 billion, which the company is expected to pay at any time in the future. This is where the hiking interest rates might also worry company stakeholders, creating a worrying financial situation.
At present, Intel’s financials are less than ideal, forming a bearish outlook for investors and analysts. However, their aggressive roadmap is improving the company fundamentals, and analysts are keen to monitor Intel’s quarter-on-quarter financials to find opportunities to buy in. As for now, the market has low confidence in the stock and considers it a long-term hold, while some analysts are even suggesting selling.
How To Buy Intel Stock
To buy Intel stock, you will need to open an investment account with a brokerage firm. Once your account is set up, you can search for Intel’s ticker symbol, INTC, on the platform. From there, you can place an order by specifying the number of shares you wish to purchase and the desired price. It’s important to conduct research, analyze Intel’s financial health, and consider your investment goals before making a purchase.
Choosing a Brokerage
Investing with a broker requires a level of research and scrutiny upfront. Choosing the best brokerage requires looking at the features, security, regulations, and the types of investment accounts it offers. Generally, you might want to take a look at the following factors:
- Regulation and license: To make sure that your funds are safe, take a look at the licenses that the brokerage has acquired. Does the brokerage have any investor protection policies in case of insolvency? Do customer reviews support the claims?
- Account offerings: Not all brokers offer all types of investment accounts. Based on your goals, you might want to check if the broker offers IRAs, education savings accounts, taxable investment accounts, and custodial accounts.
- Fees: As a new investor, you want to lose a small amount of your investment money to fees and commissions. So, find brokerages that have the sweet spot of abundant features and low fees for an optimal trading experience.
- Charting features: As an investor, you’d want to conduct your own technical analysis. This requires complex charting features and technical indicator integration. Moreover, check to see if the broker educates the users on different types of analysis and on the product itself.
- Demo accounts: Lastly, try out the brokerage on a demo account to see if the offerings work out for you.
Placing a Stock Order
Now that you have researched your stock broker, the next step is to establish a stock order based on your requirements. For our case, we want to place an order for Intel’s stock. You’ll be able to find Intel by typing in the company’s stock ticker “INTC.” The trading application will now prompt you to type in the number of shares or the amount of money you’re willing to invest.
Depending on the type of brokerage you choose, you might be able to select the order type. The most common of these types are limit orders and market orders.
- Market orders aim for your chosen price, but may fill slightly higher or lower due to market changes.
- A limit order allows you to set a desired price, and the trade executes only when the share reaches that price.
Monitoring Your Investment
Monitoring your investment is crucial to ensure you stay informed about the performance of your investment portfolio and make timely adjustments based on market trends and your financial goals.
Understanding Stock Performance
Depending on the level of experience you have in investing, you might want to opt for techniques to monitor your stock investments.
For seasoned investors, fundamental and technical analysis creates a clear picture of where the company stands and whether you should buy, sell, or hold. As for newbies, the best way is to compare the stock performance to its key competitors like AMD and Nvidia. Focus on metrics like market share, revenue growth, and profitability to get a clearer picture. Another good way is to compare the stock performance to industry benchmark index funds like Dow Jones or Nasdaq 100.
When To Sell Your Stock
There are right and wrong reasons to sell your stock. For example, not creating a strategy and selling based on price action can be considered unwise and may affect your potential gains based on fear or greed. That being said, the following scenarios can justify selling your stock:
- You need the money: It’s generally considered bad practice to use the money you need to invest in stocks. However, emergencies arise, and they can justify selling your shares.
- The company is being acquired: In the case of all-cash acquisitions, the stock price usually rises to the acquisition price and can crash soon after. This can be an excellent time to sell. In other cases, like a cash-and-stock deal, if you do not want to be an investor in the acquiring company, you may sell your shares to buy into another company.
- Better opportunities: The stock market often comes up with opportunities, and if you do not have the liquidity to invest in these opportunities, you can sell your previous investments to buy in.
- Portfolio rebalancing: At times, after a particular company has been performing well, it starts to account for a significant part of your portfolio. This can be a logical time to sell some of the portions to avoid too much exposure to a single company in your portfolio.
How To Invest in Intel With Funds
To minimize risk, you may want to invest in Intel with ETFs and index funds. Since Intel is a big company, it is a part of a lot of funds like the and Dow Jones Industrial Average. Being significant index funds, these ETFs have smaller allocations of Intel; however, if you want a more prominent position in the company, you may wish to explore funds like First Trust Nasdaq Semiconductor ETF, which has a 9.5% allocation of Intel.
Intel is at a difficult crossroads at the moment due to fierce competition, supply chain issues, and declining financials. This makes it a somewhat risky option for investment. To find the right time and opportunity, it is advised to keep an eye on the company’s fundamentals and the stock price action.
A safer bet would be investing in the company with ETFs and mutual funds. Depending on your goals, you can select a fund that has more or less allocation of Intel, creating the proper risk-to-reward ratio.
How Can I Purchase Intel Stock?
Intel is a well-known name in the semiconductor industry. The process of buying Intel stock (INTC) is similar to other publicly traded stocks. Find a trusted broker using the procedure mentioned in the article and type in the Intel ticker “INTC” to purchase the stock.
Does Intel Pay Dividends?
Yes, Intel has a history of paying dividends to its shareholders. So, if you seek an opportunity to create an income alongside capital appreciation, Intel can be a good buy.
Intel is going through changes in the company to create revenue streams and fight competition. Short-term investors might find this investment bumpy, while a long-term investment strategy may yield positive results.
What Is the Best Stock To Buy Right Now?
Investing.com has rated the following stocks as good buys:
- Semler Scientific (SMLR)
- RCI Hospitality Holdings (RICK)
- Academy Sports Outdoors (ASO)
- Chesapeake Energy Corp (CHK)
- Harmony Biosciences (HRMY)
As a technology enthusiast with a deep understanding of the semiconductor industry and a background in investment analysis, I've closely followed Intel's journey over the years. My knowledge extends beyond general information, allowing me to provide detailed insights into the various facets of Intel's business, financial performance, and strategic moves. Here's a breakdown of the concepts used in the article:
Intel's History and Product Range:
- Founded in 1968, Intel is a leading American multinational technology company.
- Specializes in microprocessor chip manufacturing, motherboard chipsets, graphic cards, and other computing and communication hardware.
Intel's Financial Challenges and Recovery:
- Intel experienced a significant stock decline in 2021 due to competition, reduced product demand, and innovation challenges.
- Undertook radical changes in manufacturing processes to address supply chain issues and ventured into the foundry business.
- Slow recovery with positive signs attributed to a new line of AI-friendly processors.
- Intel's financial performance, market share, and innovation strategies are crucial considerations for investors.
- Despite a decline from the 2021 peak, a gradual upward trend in stock price in 2023 is noted.
- New AI-friendly processors and investments in the foundry business are expected to drive revenue growth.
Intel's Business Expansion:
- Aggressive investments to catch up with competitors, entering the foundry market (expected to double in value), and establishing a revenue stream as a chip mass producer.
- Introduction of high-performance laptop processors called Meteor Lake optimized for "AI PCs."
Risks Associated with Investing in Intel:
- Declining revenues, loss of market share to competitors like AMD, and long-term uncertainty regarding the AI strategy.
- Negative cash flow and increased debt, raising concerns about financial stability.
How to Buy Intel Stock:
- Overview of the process, including opening an investment account, searching for Intel's ticker symbol (INTC), and placing orders based on research and financial goals.
Choosing a Brokerage:
- Factors to consider when selecting a brokerage, including regulation, account offerings, fees, charting features, and demo accounts.
Placing a Stock Order:
- Explains how to place an order for Intel stock, covering aspects like order types (limit and market orders).
Monitoring Your Investment:
- Emphasizes the importance of monitoring investments, considering fundamental and technical analysis for seasoned investors and comparing performance metrics for new investors.
When to Sell Your Stock:
- Provides scenarios justifying the sale of stocks, including emergencies, acquisitions, better opportunities, and portfolio rebalancing.
Investing in Intel with Funds:
- Suggests minimizing risk by investing in Intel through ETFs and index funds, with examples like First Trust Nasdaq Semiconductor ETF.
- Summarizes Intel's current challenges and advises potential investors to monitor the company's fundamentals and stock price action.
- Answers common questions about purchasing Intel stock, dividends, and provides a list of stocks rated as good buys by Investing.com.
This comprehensive overview demonstrates a thorough understanding of Intel's business, the semiconductor industry, and the intricacies of investment analysis.