Intel Corporation Stock Is a Strong Investment, But Make Sure to Buckle Up!

Broad market weakness could mean a rough ride for INTC stock, but focus on the fundamentals

By Josh Enomoto, InvestorPlace Contributor

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Ignore the Noise, Intel Corporation's (INTC) Earnings Really Were That Good!

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The Dow Jones Industrial Average started this week with a decent move upward, which trickled over to Intel Corporation (NASDAQ:INTC). But if I may be blunt, I’m not impressed. Moreover, I recommend investors maintain an inscrutable poker face. The consumer technology sector, and INTC stock in particular, will face a rough-and-tumble ride.

While the broader indices have done what they needed to do on Monday, it’s still not enough. The Dow will need to first reclaim 26,000 and then trek higher to assuage worried investors.

In addition, I’m not feeling the Technology Select Sector SPDR Fund (NYSEARCA:XLK). The sector benchmark, which includes INTC rivals such as Micron Technology, Inc. (NASDAQ:MU) and Nvidia Corporation (NASDAQ:NVDA), has looked pensive.

To be fair, some of the problems impacting Intel stock were of the company’s own doing. Chief among them is CEO Brian Krzanich dumping half his INTC holdings recently. It would be a difficult task for the world’s leading public-relations expert to spin this news positively in good circumstances. In times like these, I believe such a herculean task is impossible.

But from Krzanich’s perspective, I can see why he did cut his risk in INTC stock. Technically, shares are broadening out into a chaotic mess: think about a bullish pennant formation in reverse. Given all the other fears in the markets, I believe Intel has more downside risk nearer term.

INTC stock, Intel stock
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However, as I’ve been saying about several strong, blue-chip companies, it’s premature to throw in the towel. During downturns is the perfect time to pick up industry stalwarts at steep discounts.

For Intel stock in particular, the underlying tech firm has multiple exciting opportunities in store.

Can All the Tailwinds Turn Sour for INTC stock?

In my last write-up for INTC, I mentioned several factors that could buoy shares. One of them was Vaunt, the company’s take on smartglasses. From the pictures and specs that we’ve seen, it looks to be a winner. I wrote:

“From all angles, the Vaunt is what Alphabet Inc’s (NASDAQ:GOOG,NASDAQ:GOOGL) Google Glass should have been: clean, comfortable, and won’t make you look like what The Verge contributor Dieter Bohn calls a ‘glasshole.’

And if pricing speculation is correct, INTC will offer the Vaunt at $130, comparing favorably to Google Glass’s $1,500.”

I also mentioned that as the Winter Olympic Games’ key sponsor, Intel has a golden opportunity to showcase its latest innovations. A big one is the company’s broadcasting of the event in virtual reality (VR), which is unprecedented. Other advertised showpieces were next-generation drone footage and 5G network capabilities.

The latter, though, has come under fire for being nothing more than “fake news,” according to TechNewsWorld. Admittedly, compared to Qualcomm, Inc. (NASDAQ:QCOM), Intel is behind the curve, and many challenges remain. Still, I think it’s too early to write off INTC stock based on the ever-dynamic 5G story.

Beyond that, Intel has so many avenues to pursue; I highly doubt that all bullish factors will disappoint. For example, the tech firm’s pursuit of VR technology has natural segues into the video gaming sector. Prior to the Games, INTC sponsored an e-sports tournament in PyeongChang, the Olympics’ host city.

As anyone can tell you, video games have become a multibillion dollar industry that commands serious attention. Moreover, VR games are likely to represent the next paradigm in this sector. With its own VR technology, along with product innovations like Vaunt, INTC has a significant advantage over the competition.

Intel Stock Will Reward the Patient

At this point, how you approach INTC stock tactically will come down to whether you already own shares. As I’ve mentioned at the top, I’m not confident in the nearer-term bullishness. Too many broader and sector weaknesses exist for me to jump onboard right now.

But if you don’t own INTC stock, the strategy is a lot easier for you: wait. The current environment reminds me of the flash crash of 2015. Patient investors were able to buy household brand names at incredible prices. I believe a similar circumstance awaits us.

As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2018/02/intel-stock-is-a-strong-investment-but-make-sure-to-buckle-up/.

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