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Intel stock heads for worst day in a year after earnings cause margin concerns


UltraMega
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Intel shares dropped more than 11% in the morning trading session, touching an intraday low of $49.45, after more than a dozen analysts cut their price targets on the stock and at least two downgraded the stock. Shares have not closed with a decline that large since dropping 10.6% on Oct. 23, 2020, after third-quarter earnings; the last time the stock dropped below $50 was on Jan. 5.

 

Intel Chief Executive Pat Gelsinger tried to assure concerned analysts that gross margins would stay “comfortably above 50%” late Thursday. Gelsinger is trying to return Intel to its former glory by boosting investment in new manufacturing capacity to about $25 billion to $28 billion, nearly double its previous range, but that is cutting into profit.

 

“We are repositioning Intel for growth to be a long-term growth company,” Gelsinger said. “Near-term, we could have chosen a more conservative route with modestly better financials, but instead the board, the management team — and this is why I came back to the company — choosing to invest to maximize the long-range business that we have.”

 

Analysts, though, focused on the next few years before that extra revenue comes in while changing their ratings and price targets on Intel. Mizuho analyst Vijay Rakash contended that Intel was “losing focus” while downgrading the stock to a neutral rating from a buy and cutting his price target to $55 from $70.

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Intel Corp. shares plunged toward their biggest one-day loss in almost exactly a year Friday after the chip maker's earnings report showed lower profit margins that are expected to last for years.

 

More Intel news. Posted about this in the investing thread, but it seems newsworthy on it's own. 

 

Personally I think Intel's long term strategy is very strong and when their new fabs come online it seems like they'll be in a really good position but in the short term Intel may have rocky roads ahead with chip shortages and all that. I've got to imagine building new fabs and trying to enter the GPU race is a serious way simultaneously has to have an impact. 

 

Kinda funny, I saw an article a few days ago recommending Intel as a buy but it seemed like the author of the article was really underestimating AMD's ability to compete. A lot of articles about tech stocks seem to lack the kind of understanding of the state of tech markets that most PC nerds like us would probably be pretty familiar with. 

Edited by UltraMega
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Some recommends to buy are based on the short term. Intel's Ex-dividend date is Nov 4.  Buy some Intel stock, hope it doesn't go down between now and Nov 4 and you get free money when the divided pays.  AMD has never paid a quarterly dividend.

 

Plus they have a GPU that will be released soon.  It's going to sell no matter how good or bad it is just because of the market we're in.  

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10 hours ago, Diffident said:

Some recommends to buy are based on the short term. Intel's Ex-dividend date is Nov 4.  Buy some Intel stock, hope it doesn't go down between now and Nov 4 and you get free money when the divided pays.  AMD has never paid a quarterly dividend.

 

Plus they have a GPU that will be released soon.  It's going to sell no matter how good or bad it is just because of the market we're in.  

Sure any GPU will sell but can they make enough to make a decent profit during the chip shortage era is the question, right?

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I'm waiting (hoping) for a huge contraction 2022. **HOPING** cause cash sitting on the sidelines.  Not for people to get lost or believe their long term/short term paper gains are detrimental unless retired and source of income; but yeah.  Bottom out baby.  Let's do AMD again for 1000 @ $2 like 2009.

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3 hours ago, GanjaSMK said:

I'm waiting (hoping) for a huge contraction 2022. **HOPING** cause cash sitting on the sidelines.  Not for people to get lost or believe their long term/short term paper gains are detrimental unless retired and source of income; but yeah.  Bottom out baby.  Let's do AMD again for 1000 @ $2 like 2009.

A quote from Warren Buffet: "Don't try to predict the bottom."

 

I would also be somewhat happy about a big dip because I'd be ready to buy into it but there is plenty of profit to be made in the mean time. 

 

If Intel dropped more I would have bought in, but it looks to be stable now. Still seems like a great long term buy but the short term is hard to feel as confident about. 

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