If 2024 was an annus mirabilis for Broadcom and Nvidia, it was an annus horribilis for another chip stock, fallen tech giant Intel, which sank 60 per cent – its worst year since going public in 1971. It also parted company with its chief executive Pat Gelsinger in December.
As recently as 2020, Intel was the world’s most valuable chipmaker, sporting a market capitalisation of almost $300 billion (€292 billion). Today, it is worth just $85 billion, and is dwarfed not only by Nvidia ($3.3 trillion) and Broadcom ($1.1 trillion) but by multiple chip stocks like AMD ($195 billion), Qualcomm ($170 billion), and Arm ($130 billion).
Intel’s woes are well-known, and bargain-hunters might wonder if all the bad news is priced in, given it trades below book value – that is, below the value of its assets.
However, Intel’s cheapness is also well-known, as evidenced by headlines like “Intel stock: now phenomenally cheap” (July), “Intel stock is cheaper than it’s ever been” (August), and “Intel’s stock hasn’t been this cheap in at least 30 years” (September).
Most analysts remain wary, the underwhelming sentiment reflected in Bernstein’s advice to “stay far away”. Continued share price woes indicates investors agree, the consensus being that for now, Intel is cheap for a reason.
