Intel Stock Looks Doomed to Continue Its Downward Journey
Tech stocks are hot property in 2021 but that is not the case with Intel (NASDAQ:INTC) stock.
The stock started diving a long time ago and has continued to do so for the past few months.
INTC stock managed to hit an all-time high of $68 in January 2020 and April 2021. It has not been able to hit the $70 mark in all these years.
The deep dive in INTC stock has led to a loss of shareholder interest. The stock is trading in the $50s for a month and is currently exchanging hands at $54.
I believe the stock will continue this downward journey for the next few months and you should stay away from it until it hits rock bottom.
With that in mind, let’s dig deeper into my investment case of INTC stock.
Third Quarter Results and Intel Stock
Intel has not been able to report impressive numbers in the last quarter. The revenue decline had started in 2019 but it did rise by 8% in 2020.
This was a result of the pandemic that led to a surge in demand for PCs as remote work became the norm. However, as we return to offices, this demand might fall.
The company’s revenue has declined by 1% in the first half of the year and it is because of high competition. When it comes to the chips, Intel is losing its market share to Advanced Micro Devices (NASDAQ:AMD).
The company may have generated high revenue in the first half of the pandemic but I do not think it will report strong Q3 numbers.
Intel may work on massive plans to regain the market share but it cannot happen in the near term. It will take a couple of years for the company to succeed and achieve stellar revenue numbers to impress investors.
Massive Competition
The one factor slowing the growth of Intel is rising competition in the industry. Intel is no longer the sole market leader with the highest share.
It is losing its share to players like AMD. The company suffered a setback in 2020 when Apple (NASDAQ:AAPL) moved to Apple silicon from Intel chips.
Apple no longer needs chips from Intel and has already unveiled computers with homegrown processors. They have faster speed and higher efficiency.
A few months after that, Microsoft (NASDAQ:MSFT) started designing its own chips for the Surface PCs and data center servers.
This came as another massive blow for the company. Recently, AMD closed a deal with the U.S. Department of Energy to sell a supercomputer.
Initially, Intel was supposed to provide chips for the computer but technical delays led to cancelation and now Nvidia (NASDAQ:NVDA) will be providing the chips.
All tech companies are going through the chip shortage and it has had a direct impact on the bottom line but Intel has suffered more than that. It is losing market share to AMD despite investing a lot of money in research and development.
Until the company gets its strategies correct, it might not be able to win the market back.
The Bottom Line on INTC Stock
I think Intel is not one of the best tech companies in the industry today. It faces massive competition from Nvidia and AMD. Intel may have to work on innovation and research strategies to collaborate with some of the top tech companies in order to regain the market share.
The third-quarter results could be disappointing and may result in a further dip in INTC stock. Further, the global chip shortage can also affect the plans of the company.
It is best to wait and watch how further the stock dips before putting your money on it. If you are considering adding tech stocks to your portfolio, there are many other high-growth stocks worth buying.
On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long-term gains. Her knowledge of words and numbers helps her write clear stock analysis.
