Re: As for how INTC fits into this, consider the capex investments they've made during the worst recession the tech industry has ever faced: $7.2 billion last year and $5.5 billion this year - this is far more than any other company right now (and that doesn't even include the billions funded towards R&D). If you stick around this thread, I think you'll find that Intel has a lot of very good technology on the horizon, and some of it has already just recently been released.
I think if any company is well positioned for an economic recovery, it's INTC, and I think that a lot of people here agree. The only question is how long to wait. And that's a question that no one wants to answer, I think.
Intel has bet on a fairly rapid recovery, and as long as they get it, and as long as AMD stumbles on its new chips, Intel will do well.
The additional costs that have been picked up from all that capex will make profits a little harder to come by. Intel was in a great position to make such investments, since they could just run down their accumulated cash surplus, and did not have to add any debt. But they now have moderately higher operational costs due to additional high intensity FAB space being on-line.
If the recovery is slow (which is looking less and less likely) or if AMD's hammer turns out to be another Athlon this fall (a very real possibility) then Intel's present price is going to be looking like a pretty full valuation.
Intel is working hard to expand into other areas, but they continue to be, for the purposes of making money, a microprocessor company. And they are a microprocessor company stock that sells for 50 times what their main competitor sells for, while they sell 4 times as many units. |
