October 19, 2012
The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves and advisor David Meier discuss topics across the investing world.
Intel reported third-quarter earnings. The report was not good. In fact, John and David have three reasons they may sell their shares of Intel. Management reported that Intel's sales fell 5.5% during the quarter and that earnings dropped 14.5%. John and David have been watching the PC vs. mobile computing trend, and it has turned out worse than expected for the likes of Intel. Advanced Micro Devices continues to slump, too. Some of the slump is due to increased tablet sales. Intel wants to challenge the current leader ARM Holdings, whose core designs are used by Qualcomm and NVIDIA for mobile chips. But even though it has a good plan, the company may be too late. Finally, its server chip business, which has been strong, slumped. That's another troubling sign. There's no doubt that Intel is a strong company. But right now, all of the trends are working against it. It's time to reassess the situation, and consider cutting our losses and reallocating the capital.
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