1 Valuable Stock to Purchase

  1 Valuable Stock to Purchase A new CEO's goal is to revive the aging chip company. Semiconductor manufacturer Intel (NASDAQ:INTC) has been grappling with its own manufacturing problems, while rival Advanced Micro Devices (NASDAQ:AMD) has taken over the market. Between 2011 and 2017, AMD was grappling with major challenges. When Zen-based processors were introduced in 2017, these difficulties were completely overcome. In this way, AMG left Intel on the road. The rapid advancement of third-party foundries such as Taiwan Semiconductor (NYSE:TSM) and AMD's better product designs have combined to put AMD back in a competitive position in the CPU market.

Big bets on production

This may sound like an argument against buying Intel stock. But Intel, led by new CEO Pat Gelsinger, is making great strides and preparing for a spectacular new comeback. Earlier this year, an activist hedge fund urged Intel to quit its manufacturing business. Going out of production would get rid of investments in new chip design and production, as IBM and AMD have done in recent years. Both AMD and IBM have done exactly that over the past 12 years. Regaining production leadership will cost Intel a fortune.

1 Valuable Stock to Purchase

  The easy thing for Intel to do would be to get out of production. Intel under Gelsinger, the company will not only continue to manufacture its own chips, but is serious about making chips for other companies as well. "I hope that trend will continue and we will be a consolidator," Gelsinger said in an August interview with the Wall Street Journal.

It's time to buy Intel stock

There is a global shortage of semiconductor manufacturing capacity and this is expected to last for years. To achieve these, a large investment is required. Intel may even manage to get some government subsidies to help fund new factories. The foundry industry generated $85 billion in revenue in 2020, and that number will almost certainly increase as an increasing number of products and devices include an increasing number of chips. But the reason to invest in Intel is its future potential. It won't be quick, but it's true that Intel has the potential to increase profitability as Gelsinger rebuilds the company.  

Source: The Motley Fool

 

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