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Intel Corporation is one of the most recognizable companies in the world. The technology company founded in 1968, has become one of the largest semiconductor chip manufacturers in the world today. However, the company has fallen from the incredible heights it had once reached, as competition in the global semiconductor industry ramped up, while Intel was busy grappling with its own operational issues.
Ongoing patent lawsuits, supply chain issues, and fierce competition from the likes of AMD and NVIDIA have exerted pressure on Intel’s bottom line, which has steadily declined over the years. The once mighty chip manufacturer now faces a grim outlook as it incurs heavy losses in the short term.
However, this does not mean that Intel is doomed. The company still has the capacity to turn things around, but some analysts are skeptical as to when, or if, Intel will reclaim its former glory.
Investors might be wondering what to make of Intel’s current predicament and whether investing is worth it at current prices. For beginners, it is important to understand the context behind Intel’s stock downfall to analyze its potential future prospects.
Intel’s stock has endured a rough year in 2022 as the company has lost around 30% of its market value over the past 12 months. Bearish conditions on the market weighed heavily on the already troubled technology giant, which slipped due to disappointing earnings releases over the year.
For example, the last quarter of the 2022 fiscal year saw a drop off in almost all important metrics for Intel:
Intel’s financial woes can be attributed to the company falling behind in terms of managerial best practices. The company has also been plagued by workplace disputes and lawsuits, as well as external lawsuits from competitors for patent infringement, which weighed Intel down, which was already struggling to keep up with competing firms such as AMD and NVIDIA.
The disarray of the global supply chains also dealt a blow to Intel’s bottom line.
"All of the steps of our turnaround are underway. Investors are looking at it and seeing a bit of the green shoots, as we have described, starting to emerge in the Intel turnaround story." - Pat Gelsinger
While some may see this as the perfect recipe for disaster, Intel did get a lifeline with the CHIPS Act, which provides funding in excess of $280 billion to boost the United States’ ability to compete in the global semiconductor market. This could be the catalyst for Intel to ease its financial troubles and use its proprietary technology to get back into the global semiconductor race.
Before investors choose how much to invest in Intel stock, if at all, it is crucial to understand the inherent advantages and disadvantages of doing so. While Intel may be in a precarious position at present, the company has a rich history and a wide array of products to fall back on.
Intel stock has come under difficulties because of fierce competition from AMD and NVIDIA, coupled with supply chain issues, which caused the company to incur losses.
Yes. As of April 2023, Intel has a dividend yield of 1.52% and pays a quarterly dividend of $0.12 per share.
Intel went public on the Nasdaq in 1971 and listed its shares under the INTC ticker symbol. The company has since become a member of the Dow Jones Industrial Average, S&P 500, and Nasdaq-100 indexes.