by Jeff Reeves | September 13, 2012 12:21 pm
Semiconductor stocks Intel (NASDAQ:INTC), Marvell (NASDAQ:MRVL) and AMD (NYSE:AMD) were all downgraded today. Here’s the ugly chipmaker outlook based on Citigroup (NYSE:C) Analyst Glen Yeung’s take:
“While these names are down noticeably in recent days, prompted by a noticeably weak August and punctuated by Intel’s recent pre-announcement our downgrade today reflects our checks in Asia that stoke our concerns that the intermediate term prospects for PC’s do not look optimistic. Robbed of catalysts, we see limited likelihood PC-related shares will appreciate meaningfully in coming months, despite valuations.”
It’s fitting this downgrade comes with the backdrop of the Apple (NASDAQ:AAPL) event and its big iPhone 5 reveal. This gadget-maker’s iconic products like the iPad and iPhone have been disrupting the entire tech and media sector for some time. In a post-PC age, Intel is having trouble adapting from a PC chip business to a 21st century semiconductor manufacturer.
But does that mean INTC is a bad stock?
Here are some things in Intel’s favor:
The downside risks are clear — that fewer PCs mean fewer chips mean lower profits. And the pain at Hewlett-Packard (NYSE:HPQ) proves out how long that downward spiral can last.
There may be pain in the short term for Intel, but savvy investors should consider getting ready to make a bargain buy if this sell-off continues for much longer.
Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at firstname.lastname@example.org or follow him on Twitter via @JeffReevesIP. As of this writing, he held a long position in Apple.
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