It’s official: everybody on the planet hates Intel (NASDAQ:INTC) now. I’m exaggerating, but the tide of sentiment has certainly turned against Intel. This isn’t your cue to panic-sell Intel stock, though. If anything, you should relish the buying opportunity.
This is especially true if you call yourself a “buy low, sell high” or contrarian type of investor. When sentiment gets ultra-pessimistic and all of the terrible news is already in the public’s consciousness, it’s time to pounce. You can thank me later when your Intel shares double in value or more.
Intel’s No-Good, Awful, Very Bad Day
It was quite a spectacle when Intel stock plunged 20% to 30% on Aug. 2. Perusing the usual financial message boards, I actually spotted people predicting that Intel will go bankrupt soon.
Of course, that won’t happen. However, one can understand the public’s consternation. First of all, on Aug. 1, Intel announced that it’s suspending its dividend, starting in 2024’s fourth quarter.
Second, Intel disclosed its plans to eliminate 15% of the company’s workforce. If Intel employs approximately 110,000 people, then 15% of that would be 16,000 to 17,000 laid-off workers.
Next, Intel reported second-quarter 2024 adjusted earnings of 2 cents per share and revenue of $12.8 billion. The revenue result wasn’t terrible, since Wall Street predicted $12.9 billion.
However, analysts also expected earnings of 10 cents per share, so Intel’s bottom-line result was a wide miss. And in case all of that weren’t bad enough, Intel guided for current-quarter revenue of $12.5 billion to $13.5 billion, a range that falls short of Wall Street’s consensus call for $14.4 billion.
We’ve Heard This Story Before
Let’s rewind to late 2022 and early 2023 for a moment. The message-board gurus mocked Intel because the company had lost market share to Advanced Micro Devices (NASDAQ:AMD). People often joked about AMD “eating Intel’s lunch.”
I’m sure they’ll come up with new jokes and jeers this time around. Remember, though, that Intel stock traded at $24 and change the last time Intel was in the doghouse. Then, it zoomed above $50 when the market decided to forgive Intel for its terrible sin of losing market share.
It’s hard to envision the rainbow that’s coming when it’s storming. Intel is going through a rough period, but Intel CEO Pat Gelsinger assured that the aforementioned decisions (layoffs, dividend suspension) were “painful and hard” but necessary.
You know what else is “painful and hard?” Buying low and selling high. Unless you really think Intel’s headed for Chapter 11, now’s the time to exercise your contrarian muscles and buy a few shares.
Intel Stock: No Guts, No Glory
It takes guts to buy what practically everyone else is selling. Intel is roundly unloved, but this was also the case a year and a half ago, before the share price doubled.
Besides, what else could shock the market about Intel at this point? Everything awful thing that could happen, already did. So, if you have the guts and really want the glory (or at least, a two-bagger in the long run), go ahead and get yourself some Intel stock.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
