Chuck Saletta's last paragraph conveniently sums up Intel's recent developments -- and highlights the areas where we disagree. We appear to agree that this is no longer a growth stock, but whether it will thrive in the future, and whether it's still a great company, remain up for debate.
As I pointed out in my opening, I think Intel's best days are behind it, especially since it competes in a very tough industry with high levels of fixed costs and boom-and-bust characteristics. This makes semiconductor stocks a volatile bunch; the Philadelphia Semiconductor Index is down about 20% over the past three months. That volatility tells me the market is having trouble deciphering where the industry will head next. If you own Intel stock, beware of a potential wild ride, since it competes in an industry where one great technological advance can quickly catapult a company to rock-star status.
Granted, if you still feel compelled to invest in the semiconductor industry, Intel is one of your best bets -- it has the scale and cash flow to best withstand the ups and downs inherent in the space. But I'll stick to my original argument that in the large-cap stock realm, there are plenty more compelling opportunities out there. That means great companies in much less cutthroat industries.
As for whether Intel is a great company, there's no doubt that it once was. But its core business of providing computing chips is now maturing, and there is no clear new growth avenue -- at least, none large enough to offset its core growth slowdown. Fierce competition from a revitalized AMD
Intel is a Motley Fool Inside Value pick.
Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to further discuss any companies mentioned above. The Motley Fool has an ironclad disclosure policy.