Intel stock is low due to underperformance, market share loss, and operational challenges

From Nasdaq: 2024-08-12 11:36:16

Intel (INTC) and Nvidia (NVDA) have seen a stark contrast in performance this year. NVDA is the top S&P 500 performer with over 114% gains, while INTC is the worst, losing 60% of market cap. Intel’s struggling stock trades around $20 with a market cap of $84 billion, while Nvidia boasts a market cap of $2.6 trillion.

Intel’s stock is low due to underperformance, no recent splits, and minimal returns to investors. Once a high-flying tech giant, Intel’s stock price hit an all-time high in 2000 but now trades at a quarter of that value. The company’s revenues have been sliding, and profits have taken a nosedive.

Compared to chip industry peers, Intel’s market cap and revenues trail behind, along with lower valuation multiples. Intel is working to transform its business model but faces significant challenges. Profits have been hit hard, operating losses in the foundry business, and expected earnings per share of -$0.39 all contribute to Intel’s low stock price.

Intel’s decline began as the chipmaking industry shifted to Asia, missing key technological shifts like smartphones and AI. Competitors like AMD and Nvidia have taken market share, leaving Intel fighting for relevance in the PC market. CEO Pat Gelsinger faces a tough challenge in revitalizing the once-dominant company amidst comparisons to fallen tech giants Nokia, Kodak, and Blackberry.



Read more at Nasdaq: Why Is Intel Stock So Low While Other Chip Stocks Have Soared?