Intel (INTC) is in a world of mess and the markets are pricing in the downside risks each passing week. After peaking at $57.60 in June, the CEO’s firing, along with an announcement of a delay in the next-generation Core CPUs, sent the stock in deep-value territory.
Conventional wisdom suggests that AMD will take Intel’s market share and topple Intel. Yet Intel can afford to lose market share in the desktop and mobile space. So long as Mobileye wins business deals, Intel continues developments in deep learning, and the company defends its profit margin in the server space, the stock will recover.
INTC stock pays a dividend yielding around 2.5 percent. Its P/E of 17 times is modestly high but well-below that of Ambarella (AMBA), NVidia (NVDA), and AMD. The deep discount on this blue chip giant will eventually end. For the near-term, a lack of a CEO will benefit bearish investors.
That uncertainty is temporary. The Board will eventually find a competent leader who will grow the company in areas outside of the slow PC space. At current valuations, the market is not is not recognizing the future growth potential under a new leader. Given the stock is well-below valuations of its peers, value investors should consider buying INTC stock at these levels.
