The Dow Jones Industrial Average (INDEX: ^DJI) contains 30 of the best-known and most successful companies in the world. They build the airplanes we ride on, serve us millions of hamburgers every day, and bring us the Internet on the devices they assemble.

But while their distinct identities are often usurped by inclusion on the index, each of the Dow's components offers investors unique opportunities and exposure. With this in mind, this article series provides a cursory update on each of the 30 stocks included on the storied index. Today, we're looking at Intel (Nasdaq: INTC).

For most of the year, Intel investors had every reason to cheer. The chip maker's stock was consistently beating the broader market, and its dividend continued growing at a respectable clip. Yet, as you can see in the chart below, all of this changed in August, after which its shares have plummeted by over 10%.

INTC Total Return Price Chart

INTC Total Return Price data by YCharts

Why the drop?
For some time now, analysts and commentators have speculated that Intel would reduce its third-quarter earnings guidance. At the end of August, the Motley Fool's own Evan Niu penned an article titled: "Is Intel About to Cut Its Guidance?"

The reasons were twofold. First, the company has thus far missed the boat on mobile and is over-reliant on a dying personal computer industry, from which it gets two-thirds of its revenue. As Evan put it in a column about the state of the PC: "The PC market ain't what it used to be." Or, stated somewhat more diplomatically, according to an analyst at Citigroup: "The intermediate-term prospects of PCs do not look optimistic." And second, with many regions around the world experiencing an economic slowdown, the PC market's woes are only bound to get worse. The most troubling, needless to say, is Europe, from which Intel gets 12% of its revenue.

As many of you know by now, analysts had it pegged. At the beginning of September, the chip maker announced that third-quarter revenues would come in below the company's previous outlook. According to its press release: "Relative to the prior forecast, the company is seeing customers reducing inventory in the supply chain versus the normal growth in third-quarter inventory; softness in the enterprise PC market segment; and slowing emerging market demand."

In the aftermath of the announcement, Intel's shares predictably dropped. And with the chip maker went other technology companies like Cisco Systems (Nasdaq: CSCO), which watched as its stock price dropped precipitously in the aftermath.

To add insult to injury, moreover, multiple Wall Street investment houses have since downgraded players in the semiconductor space. Last week, Citigroup downgraded Intel, AMD (NYSE: AMD), and Marvell (Nasdaq: MRVL) to neutral. As my colleague Rich Smith observed, the megabank predicated its decision on the impact of tablet computers and smartphones on the PC industry, with shipments of the latter "falling 1% in the current quarter." And piling on top this week was Longbow, which similarly downgraded Intel and AMD to neutral from buy. Again, according to Rich: "The theory, then as now, is that if PCs aren't selling, then PC makers aren't buying computer chips to put in 'em."

Foolish bottom line
In light of these developments, it isn't difficult to make out both a bull and a bear case for the stock. On the one hand, as our in-house technology analyst Andrew Tonner noted in our in-depth report on the company, Intel sits atop a massive and highly fragmented global semiconductor market and absolutely dominates the microprocessor space. On the other hand, it remains to be seen whether the chip-making stalwart can profitably transition away from its reliance on PCs. To find out more, click here to download our in-depth report on Intel.