Dubbed the Godfather of modern computers, Intel is an iconic company that practically pioneered the semiconductor industry. Robert Noyce and George Moore founded the company on July 18th, 1968, and the name ‘Intel’ was a linguistic blend of the words ‘Integrated Electronics’. The Intel story is about a company that has had a huge impact on the world of computing with tiny little products.
In its first decade, Intel produced the famous SRAM and DRAM memory chips, and by 1971, the company had already introduced the world’s first microprocessor. The company initially struggled to hold its own in the chip market, but a deal with IBM in the early eighties positioned Intel optimally to take full advantage of the impending explosion of the personal computer market.
IBM would later deal with the then lesser-known company, Microsoft, that supplied the Windows Operation System. That was the start of ‘Wintel’ computers; machines that have dominated the PC space to date. The company has grown by leaps and bounds in the more than half a century it has existed. Its success has been attributed to producing significantly faster chips that encouraged customers to upgrade their PCs. The Intel brand has also garnered massive awareness and recognition, with everyone now familiar with the ‘Intel inside’ label on their favourite PCs. Intel designs, manufactures and sells computer parts, such as microprocessors, chipsets, microcontrollers, graphic and digital imaging products, among other related products.
Intel has always maintained an active portfolio, quickly divesting non-core segments, and wasting no time in picking up companies that will help grow its already big footprint in its space. Its major buys include the 2010 $7.68 billion acquisition of McAfee; the 2015 $16.75 billion acquisition of Altera; and the 2017 $15.3 billion acquisition of Mobileye. The company went public in 1971 and remained listed on the NASDAQ, where it trades under the ticker symbol INTC. It falls in the Technology sector, under the Semiconductors industry.
Intel Stock History
Since going public, Intel has performed multiple stock splits as follows: a 3-for-2 on October 29th, 1987; a 2-for-1 on June 7th, 1993; a 2-for-1 on June 19th, 1995; a 2-for-1 on July 14th. 1997; a 2-for-1 on April 12th. 1999; and a 2-for-1 on July 31st, 2000. When a company such as Intel splits its stock, the market capitalisation remains the same, but the lower price of the shares can attract more demand because it is now affordable to a wider range of buyers. The stock had a split-adjusted price of circa $0.50 in the mid-1980s and remained suppressed until the last half of the 1990s decade. The stock quickly broke past the psychological $10 barrier in mid-1996 and embarked on a massive multi-year rally that was fueled by the tech hype at the turn of the millennium.
By August 2000, Intel stock printed a high of circa $75, before tumbling to lows of below $15 by September 2002. The company was clearly one of the worst casualties of the tech bubble at the time. The stock continued to trade sideways for a while, and only managed to break above $40 in late 2016. It managed to gather a little steam that propelled it to highs of circa $70 in January 2020, but the coronavirus inspired economic weakness dragged it to circa $50 as of September 2020.
Intel has been a consistent dividend payer, and currently has a dividend yield of 2.64%. Dividend-paying stocks, such as Intel, may experience limited price gains compared to non-dividend paying stocks, but they will also appeal to investors that desire periodic cash payouts from their investment portfolios.
How to Trade Intel Stock
Here are some of the factors to consider when trading the stock of one of the most important tech companies of this generation:
- Tariffs and Trade Agreements
Intel is a truly global company; it has multiple manufacturing facilities in the US, China and Israel. This means that tariff changes and trade tensions can have a significant impact on the bottom line of the company, and consequently, its stock price.
- Competitor Performance
Intel enjoyed a prolonged period of dominance in its industry early on. While it is still a major player in the technology space, it also sustained threats by significant competitors such as NVidia and AMD. It is always important to track the performance of these rivals in relation to that of Intel in the major categories they are competing in.
- New Product Rollout
Intel operates in a space that is practically obligated to chart our world’s technological future. As you would expect, this is a fast and dynamic space, where new product rollouts can determine a company’s future. For Intel, their x86 product range early in its history ensured its future, but their failure to jump in on the rise of mobile devices at the turn of the century almost knocked the company off its perch. Hit products will always inspire higher stock prices, whereas ‘misses’ can trigger lower prices.
- Lawsuits and Negative PR
Intel has often been embroiled in controversial lawsuits ranging from intellectual rights to the security of their products. Lawsuits and negative PR can cause concerns among investors and sometimes provide headwinds for a stock.
- Periodic Earnings Reports
Intel Corp’s fiscal year runs from January to December, and the company releases quarterly and annual reports to give shareholders and investors updates of their business health. Positive reports, such as increasing corporate profits, can push prices higher, whereas negative reports, such as weak guidance, can pressure the stock lower.
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Intel Stock FAQ
- Why should I trade Intel shares?
Intel is one of the world’s largest and most valuable semiconductor companies, and by trading its shares you can participate in the fortunes of that industry. It’s well known that the semiconductor industry can be very cyclical, and that tendency can see shares on Intel making large moves in a very short period of time as global traders react to the changes in the industry. With Intel holding roughly 15% of the global market for semiconductors you can be sure the stock is ready to move whenever there’s a change in supply or demand for semiconductors.
- Is Intel the best semiconductor stock for trading?
There are many semiconductor companies, and all of them include volatility as one of the defining features of their stock price. Because Intel is so huge and diversified, they probably see less volatility when compared with some smaller competitors. It’s up to you to determine if this is a good thing or a bad thing. While some traders thrive on the volatility seen in some stocks, others follow a trading strategy that outperforms with stocks that have a smoother, more even price action. No matter how you look at it though, Intel is definitely a good stock for trading.
- What’s the best strategy for trading Intel shares?
Intel shares are prone to large swings in a short period of time in response to changes in the demand for semiconductors, and the supply of the same. This means a trading strategy that accounts for these types of swings is going to be best. Something like a moving average crossover strategy can work very well with stocks such as this, although there is the possibility of whipsaws when price goes back and forth too rapidly. Another strategy would be to trade the earnings releases of the company as it tends to see large moves around these events.