In this video, analyst Andrew Tonner discusses Intel's (NASDAQ:INTC) recent earnings release and what investors should take from it. Although the company beat earnings this quarter, Intel is suffering from a contracting PC market which makes up its core business.
The company is the dominant manufacturer of microprocessors and CPUs in the PC market -- and it has pricing power there -- but the market has been gutted by other devices with much more growth, such as smartphones and tablets. The semiconductor stocks exposed to those industries have performed remarkably well. Intel hasn't been able to grab a piece of those markets the way Qualcomm (NASDAQ:QCOM) and NVIDIA (NASDAQ:NVDA) have.
Currently, Intel stock sits at a 52-week low. That could indicate an oversold stock with potential to rise, but the company's own statements have reduced guidance for Q4 and reduced guidance for the full year, pushing shares lower and lower. As Andrew points out, there's potential for Intel to break away from its core business and venture into a market with more growth, but the company hasn't had the decisive will to do it.