![]() ![]() Worse yet, it’s not as if this low payout is made up for by greater upside. After the sharp dividend cut, shares now have a paltry forward yield of only 1.45%. It’s tough to argue today that INTC is a turnaround play of the “get paid while you wait” variety. Avoid, as this Big Bet Could Come Up Snake Eyes Yet unlike other speculative names, which are trying to grab a piece of a fast growing, lucrative market, Intel is instead chasing dubious opportunities in a capital-intensive, highly-saturated market. This leaves positive returns for INTC highly dependent on this “go for broke” chip foundry effort paying off. That brings us to the other element that makes INTC less blue-chip, more speculative: INTC’s decision to slash its dividend by 66% earlier this year. The company could end up investing as much as $100 billion into this Ohio project.Īlthough government subsidies will cover some of it, Intel is borrowing heavily, and dedicating much of this cash flow towards this effort as well. Intel is also working on building a chip fabrication campus in the U.S. Rather, it’s a high-stakes transformation. As I’ve discussed previously, the company is cutting some big checks, in order to build new chip foundries in Germany, Israel, and elsewhere. For starters, the strategy change Intel is implementing isn’t your boilerplate “turnaround.” Sure, it sounds strange to treat INTC stock like it’s a speculative play. Going for Broke With the Chip Foundry Gamble Shares really tumbled in late 2022, when it became clear this blue-chip was turning into a high-risk play. Unfortunately, instead of getting a bargain, these bottom-fishers in hindsight realized all they did was catch a falling knife. The growth of its annual payouts from $1.32 to $1.46 per share between 20 attracted investors, all seeking to “get paid while they waited” for Intel’s operating performance to arrive. Second, when signs initially emerged that the pandemic boom was morphing into a post-pandemic chip glut, INTC’s once-juicy dividend helped to soften the blow. While Intel’s CEO, Pat Gelsinger, is confident market share losses will stabilize this year, critics will tell you that’s far from certain.īut while the chip maker’s massive mistakes ultimately put INTC stock on an extended downward trajectory, it took some time for shares to go from merely floundering to full-on sinking.įirst, the pandemic-era boom in PC chip demand provided the company (and the stock) some support. ![]() Advanced Micro Devices (NASDAQ: AMD) has grabbed a lot of market share from the company in areas like data center CPUs. To say Intel has fumbled the ball in recent years is an understatement. ![]()
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