26.03.2020 INTEL Daily Analysis

26.03.2020 INTEL Daily Analysis

INTEL is trading at $23.77 today it went down with $0.72. Intel announced that it plans to repurchase $20 billion in shares over the following 15 to 18 months.  The chipmaker purchased $7.6 billion in shares in the fourth quarter of 2019 and the first quarter of 2020 but recently announced that it would suspend all future buybacks in light of the novel coronavirus (COVID-19) pandemic. Intel stated that its dividend payments wouldn't be affected, but the abrupt suspension of its buybacks is causing the share to go down today. Buyback plans usually cause companies to buy back their shares at high prices, ignoring investments or acquisition that could improve their core businesses. Due to this reason Intel currently faces intense competitive pressure from AMD (NASDAQ:AMD) in the PC and data center markets, as well as an unresolved CPU shortage that is frustrating many OEMs. It's also developing discrete GPUs to challenge AMD and NVIDIA (NASDAQ:NVDA). Sanjay Mehrotra, chief executive of memory chip maker Micron, which has factories in Utah, Idaho, and Virginia, disclosed that an order limiting movement of citizens in Malaysia on March 16 had hit factories in Muar and Penang, which "were briefly shut down" before officials there declared chip factories an essential business. He said the factories "have since been able to return to production on a very limited basis, in compliance with local regulations." This has therefore contributed to the asset going down since the supply and demand chain is being affected negatively.  The guidance mentioned chipmakers as an essential business because of their role supporting information technology, which has become crucial as millions of Americans work from home. However, John Neuffer, the group's president, said in a blog post that chips also play a vital role in medical equipment, power grids, and other needed infrastructure. he also said that he will ensure the continuity of semiconductor and related supply chains necessary to support the even greater range of services that will be digitized in the coming weeks and months he is of the view that since semiconductor supply chain is highly globalized, semiconductor shortages created by operating restrictions in one region cannot be readily made up by production in other regions