A recent portfolio review reminded me that I don't invest in enough large-cap stocks. What can I say? I like the small guys, such as beer-and-wings purveyor Buffalo Wild Wings (NASDAQ:BWLD).
Of course, every portfolio needs ballast and, over the weekend, I went looking for some. During the process I found myself finally starting to like Intel (NASDAQ:INTC). After all, the chip maker has a ton of cash, pays a decent dividend, and has a long-term track record. The shares had also taken a beating in recent days.
But then came yesterday's Wall Street Journal report that a design flaw will cause Intel to delay for several months its Alviso chipset for laptop computers. Yeesh.
The setback is one in a series of recent missteps by Intel. For example, last month it had to recall some chips because of a manufacturing flaw, resulting in a $38 million charge to earnings. Alviso, which was to ship to computer makers such as Dell (NASDAQ:DELL) before the end of the year, now isn't expected before the first quarter of 2005.
This is also the second time this year Intel has delayed new chips, the first coming at the beginning of the year with its Pentium M notebook processor. Notably, Alviso is designed to enhance the graphics processing features of the Pentium M.
These should be great times for Intel. Chip shipments were way up again in the second quarter after a blowout first quarter. Further, a deal has been brokered that will remove a crippling tax on American suppliers of chips to China. And other big chip makers are turning in big profits, including rival Advanced Micro Devices (NYSE:AMD).
Intel hasn't fared as well, but its numbers were good. Yet Wall Street and investors have come to expect Intel to blow away estimates every quarter, and that just isn't happening anymore.
Should you be concerned? Yeah, maybe. After all, it's usually when the pundits start blowing off bad news that the wheels finally come off. And investors and pundits alike are treating this news like I used to treat earthquakes when I lived in Los Angeles. I didn't care about the mini roller coasters till a big one threw me out of bed and shook our house to its very core. Call me crazy, but when it comes to Intel, I don't want to get caught napping.
For more Fool news on Intel, AMD, and the rest of the chip industry:
- Will Intel's missteps finally allow Dell and AMD to get together?
- Intel couldn't beat its own earnings guidance, and investors noticed.
- China's chip tax finally gets lifted.
Dell is a Motley Fool Stock Advisor recommendation. Want to learn more? Subscribe today and get a six-month money-back guarantee.
Fool contributor Tim Beyers wishes Intel would get back on track. He'd really like to add the company to his portfolio, which includes shares in Buffalo Wild Wings. You can view Tim's Fool profile here.
