Who's Moving the Dow Today? Not the Usual Suspects

Thanks to its modest share prices, Intel  (NASDAQ: INTC  ) accounts for just 1.2% of the Dow Jones Industrial Average's (DJINDICES: ^DJI  ) total value. That didn't stop the chip giant from making a major impact on the Dow today. Intel's 7% overnight plunge tied it with American Express (NYSE: AXP  ) , which is three times as influential, for the title of today's biggest Dow mover.

Intel just presented surprisingly strong results for the fourth quarter -- but with a side of weak forward guidance. Capital expenses are projected to rise about 20% this year as Intel lays the groundwork for dramatic manufacturing upgrades near the end of the decade. These costs will affect income statements for years to come via amortized accounting. If you love bottom-line profits, Intel may not be your bag right now.

On the other hand, Intel's sky-high dividend yield and record-low P/E valuation present a mouthwatering value if you don't believe that the company is dying:


INTC data by YCharts.

The company is finding its way in a rapidly changing market landscape. Traditional PC systems are becoming a niche market, rather than a bread-and-butter mainstay, replaced by mobile computing gadgets and bulked-up server systems to keep the mobile devices nourished with data feeds.

Though Intel does have a slew of mobile chips on the table, they're too new and unproven to make much of an impact in 2013. Mobility expert Qualcomm  (NASDAQ: QCOM  ) now sports a larger market cap than Intel. That idea sounded ludicrous just a few years ago, but it's an undeniable reality now.


INTC data by Ycharts.

I would argue that Intel remains a rock-solid business that plans for the long term and will come back swinging from these lows. Chipzilla will lift the Dow again.

Interested in Intel?
When it comes to dominating markets, it doesn't get much better than Intel's position in the PC microprocessor arena. However, that market is maturing, and Intel must find new avenues for growth. In this premium research report on Intel, our analyst runs through all of the key topics investors should understand about the chip giant. Better yet, you'll continue to receive updates for an entire year. Click here now to learn more.

Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2204425, ~/Articles/ArticleHandler.aspx, 9/26/2016 8:50:59 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 2 days ago Sponsored by:
DOW 18,261.45 -131.01 0.00%
S&P 500 2,164.69 -12.49 0.00%
NASD 5,305.75 -33.78 0.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/23/2016 4:00 PM
INTC $37.19 Down -0.36 +0.00%
Intel CAPS Rating: ****
QCOM $62.75 Down -0.77 +0.00%
Qualcomm CAPS Rating: ****