3 Reasons Investors Shouldn't Give Up on Intel Stocks Despite Disappointed Earnings.

  3 Reasons Investors Shouldn't Give Up on Intel Stocks Despite Disappointed Earnings. Sudden drops can bring big gains later on. As it is known, earnings seasons always attract the attention of investors and can cause significant ups and downs in companies' stocks. And Intel INTC (NASDAQ) $48,08 0,00 (%0,00) is one of them. Losing temporarily, it fell on Friday after third-quarter earnings release on Oct.

Investors disappointed in Intel's earnings

The announced 9-month income in 2021 showed a very low increase compared to the previous year in the same period. On the other hand, it was announced that the high increase in net income income came from the Company's equity investments. Despite forecasting bearish expectations during the pandemic, the news disappointed investors.

• The comeback plan

Gross margins fell not because of performance, but because Intel had to come up with a plan to take a belated move. This is due to the fact that he invested in himself. New CEO Pat Gelsinger will shift the company's focus, deciding to build two new factories in Arizona, creating chips for fab-less chip companies so they can compete with companies like Taiwan Semiconductor (TSMC) and private GlobalFoundries. It also plans to develop 7nm chips. For Intel shareholders, they may have to face years of uncertainty, as chip development cycles take at least three to five years.

3 Reasons Investors Shouldn't Give Up on Intel Stocks Despite Disappointed Earnings.

• The dividend

Intel's dividends may attract more income-oriented investors. Because Annual pay has increased every year since 2004, except for one year. This, in turn, can increase its appeal to income investors by providing some stable funds while awaiting earnings.

• The valuation

Currently, investors can buy at a low price. While Intel's P/E ratio is well below its competitors, they will likely see this earnings assessment as a bargain if they start producing chips for customers.

Is Intel stock worth considering?

As for whether Intel can make a comeback, the answer is actually unclear for now. It can't be said to offer much comfort to investors worried about signs of post-pandemic success. But it also seems certain that if it can build a successful foundry business and be technologically challenged, it can deliver huge dividends over time.  

Source: The Motley Fool

 

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