Decision Week Looms for Prominent U.S. Stock
2022 took a toll on Intel's stock, with some even declaring its demise. Amidst relentless competition from industry giants AMD and Nvidia, Intel found itself on the losing end of the market.
But fear not, for Intel's comeback story is far from over. With a series of strategic moves such as job cuts, venturing into new business fields, the IPO of its subsidiary Mobileye, and a forthcoming new chip generation, an operational renaissance seems to be on the cards.
Time will tell if these claims hold water or if Intel proves its resilience once again. The upcoming results, slated for publication after market close on a Thursday, will be the deciding factor. Market watchers anticipate these results to reveal progress and positive strides.
The outlook for 2023, a year expected to be marred by a global recession, adds another layer of intrigue to Intel's fortune.
Project updates and insights on various Intel initiatives, like contract manufacturing and the new factory in Magdeburg, will dominate analyst calls and other events. These projects have garnered a touch of skepticism, especially the construction of the factory in Germany, a country known for its sky-high energy costs.
Investors will also keep a close eye on Intel’s dividend, especially if the company's financials take a hit. A poor outlook and declining free cash flow might lead to a reduction or suspension of the dividend, a move that could send shockwaves through the market and potentially prompt a sell-off.
All things considered, despite Intel's low valuation with a P/E ratio of 10, investors are advised to stay on the sidelines until the quarterly results are out. Only when there's a clear direction for an operational turnaround should interested investors consider jumping back in.
By the way, this is what to expect from Tesla's stock post-rally.
Conflict of Interest Disclosure: The author holds direct positions in Intel's financial instruments, benefits that stem from the publication's price development.
- Intel's IPO of Mobileye, along with its strategic steps like job cuts and foray into new fields, indicate an operational renaissance is possible in 2023, despite the global recession's challenges.
- Amidst Intel's comeback attempts, investors will closely monitor the results, anticipating progress and positive strides, particularly because the company's dividend could be affected if its financials take a hit.
- Project updates on Intel's initiatives, such as contract manufacturing and the new factory in Magdeburg, will be scrutinized by analysts, with skepticism around the factory's construction in Germany due to high energy costs.
- With Intel's low valuation and a P/E ratio of 10, investors are advised to wait for the quarterly results to understand the direction of an operational turnaround before re-entering the stock market.
