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With the year almost over, we are looking at all 30 stocks in the
Dow Jones business average,
starting with the worst actors—
Boeing
and
Walgreens Boots Federation
– and working our way up to the highest benchmark stock—
Apple.
The rankings may move before the end of 2020 trading, but the stories behind the stocks should not.
The external benefits of many chip stocks are still a topic among Covid-19 pandemics, as people turn to products that Big Tech offers for living, learning and communicating . But unlike many of its competitors,
Intel
(ticker: INTC) has been a lousy year.
Shares of Intel have fallen more than 21% year to date, making it one of the worst performing stocks in the Dow. The criterion
PHLX Semiconductor Index
it has achieved a gain of around 50% so far this year.
Intel and other semiconductor manufacturers have benefited in 2020 from demand for chips used in 5G data centers and equipment, coupled with strong interest in personal computers amid stay-at-home orders. Intel, however, has been punished by investors for a series of problems that appear to be self-inflicted.
The stock made its first major hit in July, falling around 16% after CEO Bob Swan announced the company was delaying its move to the next-generation 7-nanometer generation of manufacturing technology 2022. For years, Intel’s investment thesis revolved around a strength in integrating the design and manufacture of semiconductors under one roof. As Swan has said before Barron’s, in doing so let Intel keep margins to itself.
Without its edge in manufacturing – it may have been grinding for years – Intel doesn’t look as attractive as competitors such as
Advanced advanced tools
(AMD), which is dependent on manufacturing capacity
Taiwan Semiconductor Manufacturing
(TSM).
The company opposed a mixed October, when it was proposed by Wall Street to sell its flash memory business to Sk Hynix. A few days after the news, Intel released their third-quarter results – which did not address the growing concerns of investors about the manufacturing operations.
Comments around Intel were hurt when Apple announced new self-designed chips for its Macs, with plans for more reporting along the way.
Microsoft
(MSFT) seems to have followed suit, as the company develops its own chips for their Azure cloud servers and Surface devices, according to Bloomberg News.
Despite the bad opinion, Intel has told investors that it expects 2020 sales of around $ 75 billion – which would be the company’s highest annual revenue in its 52-year history. year. It is expected to contribute $ 20.68 billion in generally accepted accounting principles, or GAAP, profit – which is twice what analysts expect to generate advanced Micro-tools in revenue.
Barron’s has taken a more contrarian view. In November, we wrote positively about the stock, making it look cheap compared to Intel’s strength, which is bolstered by sales, R&D, profits and other components. Intel plans to provide investors with more information about its plans to address the manufacturing issues as soon as next month.
Wall Street, however, is silly: Of the analysts covering the company, about 46% have a Hold rating on shares, and a quarter recommend selling. The average target price is $ 52.65, which means an upside of 12%.
Write to Max A. Cherney at [email protected]