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Buying Intel

Jul. 24, 2020 12:30 PM ETIntel Corporation (INTC)5 Comments
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  • Sent to subscribers this morning.
  • Intel announced yesterday that its 7 nm (nanometer) products would be delayed 6 months.
  • This after Q2 earnings and revenues exceeded expectations and projecting better revenues for this fiscal year.
  • Investors, rational as always, punished INTC stock by dropping it 15% as of this writing.

Yes, Intel CEO Bob Swan says INTC identified a "defect mode" in the manufacturing process and has invested in contingency plans, including using external third-party foundries. (Which might benefit our TSM and TSEM holdings.)

Horreurs! This means instead of early to mid-2022, we will have to wait until late 2022 to early 2023 for this ever-smaller chip.

However, Data Center Group sales were up 43% to $7.1 Billion due to the 47% growth in cloud service provider revenue and the introduction of the third-generation Xeon Scalable processors.

However, Intel's CCG (Client Computing Group, essentially their PC business) gained 7% to $9.5 Billion, driven by notebook demand for those working from home.

However, Memory products unit NSG ( Non-Volatile Memory Solutions Group) was up 76% to a record $1.7 Billion.

However, for Q3, Intel sees revenue of $18.2 Billion and for the full FY 2020, the company is forecasting $75 Billion in revenue, a 32% operating margin, $15 Billion in capital spending, and $17.5 Billion in Tree Cash Flow. This would translate to a $4.85 Earnings per Common Share. At $52, that would be 11 times earnings.

For Intel.

I am buying 350 shares at the current price of $51.04, and entering a day limit order to buy 250 more at $50.15.

Be careful out there!


Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in INTC over the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Unless you are a client of Stanford Wealth Management, I do not know your personal financial situation. Therefore, I offer my opinions above for your due diligence and not as advice to buy or sell specific securities.

Analyst's Disclosure: I am/we are long INTC.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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