INTC Stock Has Big Upside in New Year
Intel Corporation (NASDAQ:INTC), the world’s biggest computer chip manufacturer, has had a rough time this year. But could INTC stock be nearing a bottom? It’s possible.
Before I tell you what these developments mean for the Intel stock price’s future, let’s take a minute to briefly outline how the company got into this mess in the first place. More importantly, you won’t have a clear understanding of where the company is going unless you come to grasp just how good Intel is at dealing with issues.
The Case for Intel Bulls
Let’s be blunt here: there is no use denying that Intel stock has been on a wild rollercoaster this past year.
About a year ago, on December 5, 2014, INTC stock touched $37.90, its highest price point since February 2001. Optimism was understandably soaring, as investors and analysts alike were boosting the company’s stock launch into the stratosphere.
But this was not to be, because less than nine months later, on August 24, Intel stock fell to its 52-week low of $24.87. Intel’s stock price has rebounded phenomenally since then, though, rising by approximately 30% since that low point in late summer.
Chart courtesy of www.StockCharts.com
A rollercoaster ride indeed.
Now, there are a lot of investors who like to think of Intel as a stodgy old blue-chip company, but that’s the sort of blanket thinking that obscures a company that has tremendous upside growth potential going into 2016. The big question, of course, is the ongoing war in the semiconductor industry. However, when you take all factors into consideration, I feel that Intel has what it takes to come out on top and trounce the competition.
When considering Intel’s position, it’s necessary to detach oneself from the near-term considerations, such as financial performance and other such benchmarks, because it’s all about the company’s strategic outlook and how it plans to implement it. The microprocessors, which Intel develops and manufactures, are now hitting a technological wall of sorts and innovative new breakthroughs will be required if the company wants to remain the top dog in this business.
Just how is Intel dealing with this transition period, though? With tremendous grace and forward-thinking plans. Rather than allowing the company to get bogged down in the headwinds of a declining PC industry, where microprocessors were once essential components, Intel has dived deeper into other market niches. The company has expanded its market presence substantially in the design and manufacturing of memory chips for smartphones and other mobile devices. (Source: “What Is Intel’s Plan for Its Memory Business?” Market Realist, November 29, 2015.)
There’s no use denying the fact that smartphones and tablets are the future and PC sales are sure to continue declining. An unexpected future surge in demand for immobile desktops is unlikely to occur and Intel has recognized and accounted for this transition.
The secret weapon behind Intel’s likely success in this endeavor, however, is the company’s huge manufacturing capacity and research capabilities. This is the sort of competitive advantage Intel can ride to success over its rivals. When we’re talking about manufacturing memory chips on a global scale, no one can compete with Intel and the company is fully capable of squeezing out the small fish.
The Bottom Line on Intel Stock
I’m extremely bullish on the Intel stock price because the company was successfully able to display innovation in its product development despite many years of dominating the microprocessor market. It’s tremendously reassuring to know that INTC stock is in good hands and has a leadership team who recognizes broad market trends and has the foresight to adjust to them.
When you really get down to it, the fundamental principles behind microprocessors have not evolved too much since Intel stock went public. Put simply, the fundamental designs and principles behind how microprocessor chips function are basically the same as they were 30+ years ago.
I don’t know about you, but a company that has that solid a track record in generating results time and time again is one I’m bullish on. With the vision and assets to implement sound strategies, it’s quite possible that the INTC stock price could soar in 2016.