Intel’s (NASDAQ:INTC) steep drop below the 50-day moving average after the earnings report created a buying opportunity for value investors.
The market is concerned that a lack of sales growth is disconcerting. When the pandemic drove PC sales to multi-year highs, Intel’s revenue should have climbed.
Intel faces competition from AMD. Server sales are down as AMD’s EPYC demand rises. Nvidia (NASDAQ:NVDA) is also developing a CPU for the data center. Still, Intel’s legacy CPU is performing on par with AMD chips in the PC market. This will buy it enough time to refresh its architecture and manufacturing processing.
INTC stock is a great buy at under $50. Value investors collect a dividend while waiting and benefit as new leadership results in business recovery. Its foundry installation in the U.S. will alleviate the chip shortage. Intel’s margins will expand, as it no longer relies on the Asian market for production.
Intel shares closed at 12 times price-to-earnings after posting results. The ongoing shortage will lift its profit margins. This will give Intel plenty of cash flow growth to promote its latest CPU and invest in the chip’s refresh.
Intel stock is one of the cheapest in the technology sector. It is profitable but slow to innovate. As it accelerates product development, investors get the stock on sale.
Tech Insider
