Please note this is only an opinion and not financial advice. Direct stock investing is subject to business and market risks. Therefore, it’s highly recommended to do proper risk management and your own due diligence before investing.
Value Stock Analysis as on 09 Aug. 2023
Top Value Stock
NASDAQ: INTC
- Intel Corporation is the largest semiconductor company globally and a major provider of microprocessors and chipsets.
- Intel is diversifying away from its PC-focused operations by expanding into data-driven sectors like artificial intelligence (AI) and autonomous driving.
- Intel has data-centric businesses accounted for 48.6% of total revenues in 2021.
- Intel has reorganized its business segments to better reflect the growth in both large traditional markets and high-growth emerging markets for increased transparency, focus, and accountability
- Mobileye offers driving assistance and self-driving solutions, while IFS is a fully vertical, standalone foundry business that offers a wide range of manufacturing services to meet unique product needs, including sort and test capabilities.
Revenue Splits:
- 52.4% – Client Computing Group (CCG)
- 30.9% – Datacenter and AI Group (DCAI)
- 10.5% – Network and Edge Group (NEX)
- 3.5% -Mobileye
- 1.8% – Intel Foundry Services (IFS)
- 0.9% – Others
What we think are pros of business:
- CCG focuses on high-growth businesses, thin-and-light, commercial and gaming, and growing opportunities in areas such as connectivity.
- The market’s surging demand for new PC and data center chips throughout the pandemic.
- The rise in the use of computers which was driven by remote work, high-end gaming, and the feverish usage of cloud services
- The company offers a wide range of semiconductor products, including CPUs, GPUs, and networking chips, catering to various industries.
- The company collaborates with industry leaders and technology companies to develop integrated solutions and expand its reach in emerging markets.
- Intel’s products are integral to modern computing, making its business relatively stable, even in changing economic conditions.
What we think the risks are:
- The semiconductor industry faces ongoing legal and regulatory challenges, including antitrust investigations and intellectual property disputes, which can lead to fines and reputational damage.
- Intel operates in a highly competitive industry, facing rivalry from other semiconductor manufacturers, including AMD, Nvidia, and ARM-based chip providers. Intense competition can impact market share and pricing.
- While Intel is diversifying into data-centric sectors like AI and autonomous driving, success in these markets is not guaranteed and may require significant investments with uncertain returns.
Fundamentals:
- Market Cap: 159.18 Billion
- Forward PE: 21.60
- Debt/Equity = 0.44
- Dividend: 1.35%
Technical for a long-term perspective:
– Formation of double bottom pattern and a perfect sustainable breakout.
– Crossing its 200 EMA and also give a closing of monthly candle above EMA.
– It may retest the Previous High of 70, which is also acts as a resistance.
– It may consolidate for few weeks around the current levels and after that it will start shooting up.
– RSI is very bullish and shows strength as it is currently around 50
Entry = Above 39
Stop Loss = 32.45
Target = 55 /68 / 75 / 83
Our Final Thought:
The increased demand for new PC and data center chips during the pandemic, fueled by remote work, gaming, and cloud services, provided a temporary boost for Intel, masking its underlying challenges. However, as the pandemic’s economic impact subsided, PC shipments sharply declined, and macroeconomic challenges led data centers to reduce their spending. Consequently, Intel experienced five consecutive quarters of declining revenue and remained unprofitable on an adjusted basis for the past two quarters.
It is showing very bullish sign on charts which may lead to increase in stock price in near future, Company is entering into Artificial Intelligence business all over the world which may increase the chance of earning potential.
Please note this is only an opinion and not financial advice. Direct stock investing is subject to business and market risks. Therefore, it’s highly recommended to do proper risk management and your own due diligence before investing.
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