Is that the right market reaction, or a knee-jerk overreaction? As you'll see later, when I make an opportunistic CAPScall on the stock, I think investors are staring themselves blind at the bad news.
Citing hard-drive shortages due to flooding in Thailand, Intel lowered its revenue guidance by $1 billion to around $13.5 billion. Moreover, gross margins will come up thin in the fourth quarter as Intel's factories really work best when running full speed ahead.
OK, so that's a little scary. But then you're ignoring the other half of this story: Two quarters of hard-drive shortages should lead into "a rebuilding of microprocessor inventories as supplies of hard disk drives recover during the first half of 2012."
That's the silver lining in this cloud.
And it makes perfect sense when you think about it. Western Digital
When hard-drive volumes go back up to normal levels, system builders including Hewlett-Packard
So if you've wanted to buy Intel shares but held your itchy trigger finger as share prices jumped 30% since late August, here's a small correction that helps you get a better buy-in price. Intel is a tremendously strong business that will bounce back with a vengeance, so I'd suggest that you take advantage of this opportunity.