Intel Stock Takes a Hit: Is the Chipmaker Being Left Behind?
As of 3 p.m. ET Monday, Intel’s stock price had plummeted by 2.9% despite a relatively positive day for the market, with the S&P 500 index up by 0.5% and the Nasdaq Composite gaining 1%. This decline comes on the heels of an article published late Friday by The Wall Street Journal, which highlighted the challenges facing Intel.
The Challenges Facing Intel
In an article titled "Intel’s Problems Are Even Worse Than You’ve Heard," technology writer Christopher Mims painted a bleak picture of Intel’s competitive position. He noted that the company is facing intense competition from disruptive innovators such as Nvidia, ascending rivals like AMD, and smaller challengers. Additionally, Mims highlighted the pressure Intel is under from Microsoft, a crucial partner in maintaining strength in the personal computing and business computing spaces.
AMD’s Inroads into Intel’s Core Markets
Mims noted that AMD has been making significant gains in Intel’s core markets, including the data center segment. In fact, AMD generated more sales in this crucial area last quarter than Intel did. This is a significant concern for Intel, as the data center market is increasingly important for the company.
Intel’s Fabrication Segment Performance
While Friday’s article focused on Intel’s chip design business, the performance of its fabrication segment will also be critical in shaping stock performance. As the world’s third-largest chip fabrication company, behind Taiwan Semiconductor Manufacturing and Samsung, Intel’s fabrication segment has been underperforming. The company opted to skip using its 20A fabrication node, and early indications suggest that its 18A process node may not be a winner either.
A Huge Setback for Intel
If Intel’s 18A process node fails to deliver, it would be a huge setback for the company. Under former CEO Pat Gelsinger, this process node was positioned as central to the company’s strategy in the fabrication space and overall growth strategy. This failure would add to the already significant pressures facing Intel in its design and fabrication businesses.
Intel’s Stock Price Plummets
Intel’s stock has fallen by roughly 57% over the last year, making it a beaten-down valuation that could potentially set the stage for a strong comeback. However, if Intel is going to regain investor confidence, the company will need to present a convincing path forward and deliver some reassuring signs of solid execution.
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The Motley Fool’s Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft, short February 2025 $27 calls on Intel, and short January 2026 $405 calls on Microsoft.
Why Intel Stock Is Falling Today
This article was originally published by The Motley Fool.
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