Intel Incorporation is a company based in the United States. The company designs, manufactures, and sells semiconductor products in the United States. The company sells CPUs and GPUs as well as other hardware and software related to that business. The company also operates manufacturing facilities for these chips. The company was founded in 1968
Why You Should?
- Intel is a decent growth play in an investor’s portfolio. The company continues to see strong demand for its products as the world continues to purchase more mobile devices and use software powered by AI and data centers. This future growth will benefit the company and its investors.
- Intel, unlike other semiconductor companies like Nvidia and AMD, operates its own chip manufacturing facilities around the world. They have facilities in Europe and the United States which offer a great resource to companies who do not want to get involved in the Asia manufacturing bottleneck. This chip manufacturing sector will help the company grow in the future.
- The COVID-19 pandemic has positively benefited the company. The company saw rising sales volumes of chips used in PCs as consumers around the world purchased more computers to adapt to the new pandemic environment. This has benefited the company go through this rough economic time and has also benefited investors.
Why You Should Not?
- The company faces tough competition in the semiconductor industry. Some of these competitors include Qualcomm, AMD, Nvidia, and Taiwan Semiconductors (manufacturing company). This competition might hurt the company and its investors in the future.
- Current chip shortages and other supply chain issues might also hurt the company. In their most recent quarterly earnings, the company reported lower profit margins for the future quarter, due in part because of higher shipping costs, shortages, and other issues with the supply chain. This has hurt the company throughout the pandemic and might also hurt investors.
- The company has been losing out to companies like Nvidia and AMD over the past couple of years. These two stellar companies have designed far superior products to the ones that Intel offers and have subsequently started to take market share from Intel. This new competition has negatively impacted the company and its investors.
- The company has started to report lower profit margins over the past couple of quarters due to issues with the supply chain (higher shipping costs, shortages, higher raw material costs) as well as new spending in the manufacturing side of the business. This hurt the company’s stock price and might continue to put negative pressure on it in the future.
I think that Nvidia and AMD are better investment options due to Intel’s tough competition, chip shortages, and other supply chain issues, as well as decreasing profits. However, the company is a good growth play, might become a manufacturing juggernaut, and was positively impacted by the pandemic.