Are you feeling the ripple effects of Intel’s recent struggles in the semiconductor industry? Don’t worry, you’re not alone. Investors are still reeling from the news that Intel lost a staggering $7 billion building chips for its competitors last year. And to make matters worse, investment bank Bernstein has added fuel to the fire by suggesting that there’s “no real reason to own Intel stock until 2030.”
But why is Bernstein so down on Intel? The root of the issue lies in Intel’s decision to separate out financial results for its semiconductor foundry business. When investors got a closer look at the historical performance of the foundry business, they were less than impressed. Last year, the foundry business posted losses of nearly $7 billion, a 35% increase from the previous year, with sales dropping by 31%. Intel is hopeful that it can turn things around and reach 30% operating profit margins by 2030, but Bernstein remains skeptical, calling the forecast “aggressive.”
So, is it wise to invest in Intel in 2030? According to Bernstein, now is not the time to buy Intel stock. Despite a recent sell-off, Intel stock still trades at a steep 99 times trailing earnings. The company is also burning through more than $14 billion annually, further exacerbating its already precarious financial situation. Most analysts predict that Intel won’t stop hemorrhaging cash until at least 2028. Until there’s a significant turnaround, it may be best to hold off on investing in Intel.
If you’re considering putting your money into Intel, it might be worth exploring other options. The Motley Fool Stock Advisor team has identified the 10 best stocks for investors to buy now, and Intel didn’t make the cut. These stocks have the potential to deliver substantial returns in the coming years, outperforming the S&P 500 since 2002. If you’re looking for a reliable blueprint for investment success, Stock Advisor provides expert guidance, regular updates, and two new stock picks each month.
Don’t let Intel’s struggles deter you from making smart investment decisions. Stay informed, explore your options, and consider the advice of trusted experts to navigate the ever-changing landscape of the finance world.
