Intel has led the market of semiconductor computer chips for years, however, the reduction in PC sales, as well as some inner company problems and strong competition, set Intel back a few steps.
In any case, the company has recently refreshed its management team, hoping to infuse the company with more trust and positive optimism for what is to come. It remains to be seen if Intel can jump back to becoming the leader of the semiconductor chips manufacture, while other companies have taken over.
We will analyze the company’s stock to understand if it’s a good time to buy Intel shares or not. We have also designed a step-by-step guide to help newer traders understand how to buy Intel stock and guide them in learning about diversifying their portfolios and managing risk while investing. In fact, we hope that our list of pros and cons of owning Intel stock help traders decide if this is the right investment for them.
Finally, we will learn more about the company, its history, and the events that made it what it is today, hoping to be able to make more accurate predictions about where the company is going.
The financial situation of Intel
Experts think the price of Intel stock is cheap, making it an attractive option for investors. While this is true, traders looking to invest in the long game will find themselves frustrated with the stagnant growth that Intel share prices are experiencing, which is not surprising considering the growth the company has experienced in the last year.
The Covid pandemic had a positive effect on the demand for computers, and Intel benefited from it, though not as much as it could have. Sales went up 8% in 2020, but predictions for 2021 put them already 1% lower, which is disappointing and may reflect on the stock price.
Something that may have had an impact on the downswing movement of Intel shares’ price is the reduction of the cash flow the company keeps. From more than 21 billion dollars last year, the company expects to meet a 10 billion expectation quote of cash flow in 2021. This can be a worrying sign for investors, regardless of the long history Intel has.
Pros and cons of buying Intel stock
As with everything else, there are advantages and disadvantages to owning Intel stock. As traders may have different priorities and strategies, they may find some more important than others. Overall, they are meant to help you understand if Intel stock is the right investment for you.
Advantages of owning Intel stock
Intel has redirected its operation towards newer markets that have promising futures. Four particular areas promise to bring Intel back to be the leader of the industry: cloud, data, internet of things, and AI.
These areas are going to continue expanding and developing and if Intel plays its cards right it can lead the technological revolution.
And one of the main areas where Intel has had to evolve is the PCs and how much they depend on them. The era of PCs is over, and Intel has to move towards the data market which is now the largest in the industry. Intel has made this movement in time and now their data-centered operations take over 50% of the company’s work, which, considering data-centric businesses are the future, positions Intel in a good place.
Last, but not least, Intel stock is cheap. Why is this a pro? Well, it helps reduce risk, as traders can buy more shares with less money. And, if things go right, investors have more chances to make a significant revenue too.
Cons of owning Intel stock
Intel is lagging. We have already mentioned how a myriad of problems have created the space for other companies to take over in the semiconductor chip race. Intel’s rivals have conquered the lead in the industry thanks to Intel’s own slow remodeling and renovation of their manufacturing structure.
Companies like MDA and NVIDIA have taken a larger portion of the market when Intel had to take a step back, and with more competition comes a stronger need to innovate and develop, which promises interesting things to come to customers.
How to buy Intel stock
In order to buy Intel stock, traders need a broker. And to find one that matches your trading style, as well as your level of expertise, while offering you all the tools you need to make successful deals, it’s of utter importance.
There are many brokers out there, so, how do you make sure you are choosing the perfect broker for you?
There are many things to consider when choosing a broker. But, first of all, traders have to think and define their priorities, trading style, and financial needs. This is the only way they will be able to find a broker that is perfect for them!
Among the many aspects that traders have to keep in mind, the first and most important one is their safety. To assure their information (and their money) is safe, traders have to check the broker is regulated by the appropriate entities.
Once this is done, there are several other things to consider: costs, research, and educational tools, features on the online trading platform, customer service, plus extra options and discounts. The weight each of these areas has in choosing a broker will depend on the traders’ priorities. Are you looking for low fees and commissions? Or do you prefer high-quality research tools? Are you a small day trader or a high-volume investor?
Take your time and choose wisely, since this decision will have an impact on how successful you can be as a trader.
Chosen a broker already? Now, it’s time to open an account. This process is usually rather easy, though verification can take up to a few days.
All set? Deposit some money and start buying shares. To do this, traders have two options. They can buy the stock at the current market price, which means the order your place is executed immediately, or they can opt for a limit order, which means they decide at what price they want to buy the shares, and when the stock value reaches or drops to that defined price, then the order is executed.
There are advantages and disadvantages to both methods, and choosing one or the other will depend on your overall trading strategy.
Overview of the company
Intel is a company that develops and sells semiconductor products for computers and mobile devices. In most recent times they have benefited from the fast-growing segment of the market including smartphones, tablets, and cheap mobile phones.
While the company headquarters are in Santa Clara, USA, a large portion of the company’s employees are located in Germany, where Intel has several manufacturing operations going on.
Intel has a very strong presence in 17 countries and it’s aiming to become more popular in the Asian markets, which could boost the company’s business even more (at the moment China and Hong Kong take 30% of the company’s market).
Intel was founded in 1968.
Final thoughts on buying Intel stock
There is no clear answer for those asking if Intel is a buy or not. The company is experiencing a stagnant period and this may change in the longer term, but in the short term, the rest of this year, it seems it will stay the same.
If Intel manages to keep its market leadership and consistent profit growth, then it may actually be a safe long-term investment.
Most of the indexes on the financial report that investors can look at, point in the wrong direction. Income, sales, cash flow, and other aspects are all in the low in 2021, which is quite disappointing. Traders looking to invest in the belief that Intel still has it in them to adapt and grow, and be positioned again among the best in the semiconductors business.
