Intel (INTC) has been for a long time one of the big fish when it comes to the semiconductor chip making industry. Founded in the year 1968, Intel has been on the forefront of manufacturing network interface controllers, embedded processors and integrated circuits among other electrical components. As of last year, the semiconductor industry had grown to $304 billion dollars with other key players, including Advanced Micro Devices (AMD) and Texas Instruments (TXN). Intel has however been the leader in this industry with a market capitalization of over $143 billion compared Texas' $37 billion and AMD's $5 billion. As a result of the fact that Intel has had its hand in a number of dealings that have gone to the revolutionizing of the computer related world, it has left investors with no doubts about its ability to not only adapt to major market changes but also to new and emerging trends. With the diversification of Texas Instruments into the production of military based equipment such as computers and infrared missiles, it has undoubtedly found a highly profitable niche that will see it better compete with Intel's production of personal computers' microprocessors.
In terms of share prices, Intel has been somewhat struggling to keep up with Texas instrument which currently stands at about $32. Intel stands at about $28 which registered to a 1.4% drop from the previous closing while AMD trails with $8 a 2.4% drop also from its previous closing. This can be attributed to the volatility of computer based markets and critics crying wolf every time the market faces a slump. Personally, I think that the Intel stock has been able to reassure me in terms of the security of my investment. With assets totaling to about $71 billion along with a shareholder's equity of about $45 billion, shareholders are assured of the corporation's liquidity compared to Texas' $13 billion. A careful analysis of Intel with regards to both Texas instrument and AMD proves that it is faring well be far. Intel maintains an extreme lead in terms of net income which registers at about $13 billion in comparison to Texas' $2 billion and AMD's $491 million. In order to further its growth, Intel has had to invest in the expansion of its investment portfolio through cash investments of over $10 billion.
Intel's decisive action to make acquisitions of various Qlogic products along with assets of its Infiniband business is expected to be a major game changer. This is due to the fact that Intel will be able to effectively increase the quality of its systems which is also bound to attract more consumers. As a result, analysts predict that revenue is expected to increase so long as the deal goes through without any hitches. With this acquisition, Intel's vision of the development of the Extraflop performance computers has been estimated to take a shorter time than expected. I would urge any shareholder to hold on to their shares, since should this vision be realized, an exponential growth of Intel is bound to occur. Since Intel accounts for about 13% of the total market share, it would be safe to assume that this figure will also undoubtedly rise in the very near future.
Despite the best intentions, Intel has had to experience a number of controversial court interventions in nearly every region in which it has expanded to. Intel has been for a long time interlocked in legal battles with its main rival in the microprocessor production which is AMD. The claims that have been put forward in the lawsuits range from Intel using unethical means to stub out competition to underpricing components. Intel has come under the accusation that it is fond of making use of legal claims in order to lock competitors out of the microprocessor market. Amidst all these legal problems that have been faced by the corporation, it has been able to keep its head above water with its share prices suffering only minor damage. Since Intel has been able to win the majority of its court cases while choosing to settle in some, it is safe to assume that it is extremely competent when it comes to dealing with legal matters, a fact that is quite reassuring to me.
I personally think that the future holds a great deal of trials for all of these ventures, and in order for any one of them to truly prosper, they will have to put a lot of effort to ensure that they are able to adapt to the coming changes. With third world countries, especially in the African continent, feeling the need for more affordable computer components, analysts eagerly await to see whether Intel will be going after this new market. Undoubtedly if it chooses to do so, the dollars per unit sale made figures will increase to the satisfaction of any shareholder whether substantial or not. By also taking calculated risks in the diversification of their investment portfolio to include assets not necessarily held by computing firms, I think shareholders will have better nights with the assurance that all their eggs are not being kept in a single basket.
As I draw to a close on this article, I would personally recommend Intel's stock to any long-term investor, as I predict that its current price will quite possibly increase even to a point of doubling, as can be concluded from its high price to earnings ratio.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.