Intel Stock Price at a 30-Year Low: Is Intel Stock a Buy?
California-based Intel Corporation (NASDAQ: INTC), once a dominant player in the semiconductor industry, has seen its Intel stock price plummet to its lowest level in 30 years. With a current market cap of $93.8 billion, Intel’s stock price has dropped 60.8% from its 52-week high of $51.28, which it reached in December last year. Over the past three months, Intel stocks have plunged by 33.6%, significantly underperforming the broader S&P 500 index, which gained 4.7% during the same period.
This sharp decline begs the question: Is Intel stock a buy at these levels, or should investors remain cautious about a company facing significant challenges?
Intel Stocks Struggling as AMD Gains Market Share
A primary reason for Intel’s stock price decline is the growing competition from Advanced Micro Devices (AMD), which has been steadily taking market share from Intel in both PC and server CPU sales. According to Mercury Research, AMD’s share of the PC processor market rose to 21.1% in Q2 2024, up from 17.3% in the previous year. In the server CPU market, AMD’s unit share increased from 18.6% to 24.1% in the same period.
The success of AMD, especially in processors designed for artificial intelligence (AI) applications, has put Intel stocks under pressure. Intel has struggled to keep pace with its rival, particularly in capitalizing on the booming AI sector, raising concerns among investors about Intel’s long-term growth prospects.
Intel’s Blue-Chip Status in Danger
For the first time in 30 years, Intel’s market capitalization has dropped below $100 billion. With Intel stock prices falling nearly 60% this year, the company is at risk of losing its spot in the prestigious Dow Jones Industrial Average (DJIA).
To maintain its place in the DJIA, Intel needs to demonstrate sustained market strength, growth, and industry leadership. However, its current struggles could lead to its replacement by faster-growing tech companies like NVIDIA or Salesforce, which are thriving in the AI-driven market. Losing its place in the DJIA would be a blow to Intel’s reputation and could further negatively impact Intel stocks.
Steps Intel is Taking to Rebound
Despite its struggles, Intel is actively trying to turn its fortunes around. Key steps the company is considering include:
- Business Restructuring: Intel may split its product design and manufacturing businesses to streamline operations.
- Mergers and Acquisitions: Intel is exploring potential mergers and acquisitions, with Marvell Technology Group possibly acquiring its Altera unit.
- Project Cuts: Intel is reconsidering costly projects, such as scrapping its $32 billion factory expansion in Germany, which has already been delayed.
- Reduced Capital Spending: The company plans to cut capital spending on manufacturing capacity to conserve cash.
- Focus on Core Business: Analysts suggest Intel should exit the foundry business, which has been dragging down margins and could continue to hurt earnings through 2025.
Is Intel Stock a Buy?
With Intel stocks trading at historically low prices, the potential for a rebound may attract value investors. However, the company faces stiff competition from AMD, missed opportunities in the AI sector, and ongoing revenue challenges. While Intel is making efforts to restructure and refocus, these initiatives will take time to bear fruit. Investors considering whether Intel stock is a buy should carefully weigh the risks before making a decision.
