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Analysis before buying or selling Intel shares

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Intel's revenue and market capitalization

03/12/2021 - 10h04

At the end of its 2020 financial year, the American semiconductor giant Intel unveiled the results of its business review for the year. These came out less strong overall.

Elements to consider before selling or buying Intel shares

Analysis N°1

First of all, we will follow the group's investments in research and development which will enable it to offer new products.

Analysis N°2

We will also follow the evolution of the competition and market shares in the segment in which Intel is best positioned, namely that of semiconductors and microprocessors.

Analysis N°3

The policy of developing Intel's international activities is also a strategy to be followed with great interest, as is the establishment of strategic partnerships with other major groups.

Analysis N°4

The investments made by the group in the mobile segment, whether in the creation of hardware or software.

Analysis N°5

Buy-outs of other technology companies that may increase its product portfolio and thus its market presence.

Analysis N°6

The manufacturer's long-term strategies and objectives, as well as its development plans over several years, are significant elements if you wish to anticipate future variations in this value.

Analysis N°7

Lastly, we should of course keep an eye on the company's quarterly or annual results, comparing them with the targets set by the group and also with analysts' expectations and consensus.

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General presentation of Intel

In 1986, the Intel Corporation was founded in the United States. Today, the company is still known as the world's largest manufacturer of microprocessors. But the company does not only produce microprocessors, but also motherboards, computer chips, graphics processors and flash memory.

Thanks to the boom in the computer sector, Intel has been a big name in technology since 1991.

This is confirmed by the company's turnover, which reached almost 40 billion dollars, with an annual net profit of almost 8 billion dollars in 2012. The breakdown of the company's activity can be summarised as follows:

  • The vast majority of the business is of course the manufacture of microprocessors and computer equipment of all kinds, with over 55% of the company's total turnover.
  • Next comes the production of communication products such as telephone chips or so-called connection products, which account for 42% of total turnover.

It is obvious that Intel is today one of the international leaders in its field of activity. In fact, a big part of the development strategy of this group is based on strategic acquisitions of other companies in diverse fields of activities. We invite you therefore to find out in detail these different acquisitions that have been made over the course of the last ten years:

  • In 2009: the acquisition of the American company Wins River Systems in the field of embedded systems.
  • In 2010: the acquisition of the American company McAffe in the field of computer security and of the German company Infineon in the field of wireless technology.
  • In 2011: the acquisition of the Dutch company Silicon Hive in the field of DSP and the Israeli company Telmap in the field of computer software.
  • In 2013: the acquisition of the American company Mashery in the field of computer software, of the Irish company Aepona in the field of SDN, of the Finnish company Stonesoft Corporation in the field of computer security, the Israeli company Omek Interactive in the field of software and the Spanish company Indisys in the field of automatic processing of natural language.
  • In 2014: the acquisition of the American company Basis in the field of portable technology, the Canadian company PasswordBox in the field of computer security and the American company Avago Technologies in the field of semiconductors.
  • In 2015: the takeover of the American company Vuzix in the field of portable technology, the German company Lantiq in the field of Telecom, the American company Altera in the field of semiconductors, the American company Recon In the field of portable technology and the American company Saffron technology in the field of Cognitive computing.
  • In 2016: The acquisition of the German company Ascending technologies in the field of UAVs, of the Israeli company Replay Technologies, of the Italian company Yogitech and the American company Nervana Systems.

In view of all these companies that are now part of the group Intel, we understand better how this company can remain at the forefront of technology and how it remains in a strong position despite the increasingly fierce competition. Of course, all the future acquisitions could have an undeniable influence on the price of this asset on the stock market and must therefore be the object of utmost attention.

Analysis before buying or selling Intel shares
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The major competitors of Intel

If a good knowledge of the Intel group and its activities is of course important to invest in this stock, the same goes for knowledge of its competitive environment. We therefore suggest that you find out who the group's main rivals are in its sector of activity:

AMD

The AMD Group is an American company specialising in the manufacture of graphics cards, semiconductors and graphics cards. It is currently one of the world's largest producers of semiconductors and the second largest manufacturer of microprocessors for PCs.

Samsung Electronics

This Korean company specialises in the manufacture of electronic products and employs 308,745 people. It is also one of the world's leading high-tech companies, second only to Apple but ahead of giants such as Microsoft and IBM. The group's products include semiconductors and flash memory.

Qualcomm

This American company specialises in the mobile technology sector and in particular in the design and implementation of telecommunications solutions. It is one of the world's leading companies in its sector and in the design and sale of mobile phone processors.

Texas Instruments

This other American electronics company is known for its passive electronic components and semiconductors. It is based in Dallas, Texas, and employs over 30,000 people with a catalogue of over 80,000 products including microcontrollers, processors, sensors, wireless connectivity and calculators.

NVidia

NVidia Corporation is an American company that designs graphics processors, graphics cards and graphics chips for PCs and game consoles. It is based in California and outsources the entire production of its chips to third-party companies. The group mainly designs graphics circuits that range from netbook models with NVidia Ion to gamer models such as GeForce and for the professional world with the NVidia Quadro model among others.

STMicroelectronics

This company, also known as ST, is a Franco-Italian multinational company with its headquarters near Geneva in Switzerland. It specialises in the design, manufacture and sale of electronic chips or semiconductors. It re-entered the CAC 40 stock index in 2017 after exiting four years earlier.

Toshiba Corporation

Finally, Intel's last major competitor is Toshiba Group, a Japanese company specialising in the manufacture of electronic and computer equipment. It is currently the leading semiconductor manufacturer in Japan and the third largest manufacturer in the world in this segment after Intel and Samsung. The company is currently headed by Satoshi Tsunakawa and employs over 127,697 people worldwide.


The major partners of Intel

SAP

In 2019, Intel Group announced a multi-year partnership with SAP Group to optimise Intel platforms, including the Xeon Scalable processor and Optane DC persistent memory, for SAP enterprise applications. This alliance will enable customers to deploy applications running on Intel infrastructure in the cloud, on-premises or in hybrid environments.

AMD

Another interesting partnership that Intel has developed in recent years is with its PC microprocessor competitor AMD. The two competitors have decided to join forces in order to collaboratively develop an electronic engine for laptops. This surprising partnership allows the two companies to face another major competitor, Nvidia, together.

Samsung

Still in 2019, rumours have been circulating about a possible partnership between Intel and Samsung in order to help Intel cope with its processor shortage. This partnership would concern in particular the future Rocket Lake processors which are expected by 2021 at the latest.

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Positive factors for Intel shares
The factors in favour of a rise in the Intel share price:

To fully understand how the Intel Company may grow or change over time and therefore to predict this group’s growth possibilities it can be advantageous to be aware of its major strengths and weaknesses. These factors could be said to be similar to the advantages and disadvantages of this company’s share price on the stock markets and therefore could assist you in understanding how the group will be able to face threats and competition and seize possible opportunities. This is what we shall now examine:

We shall commence this comparative analysis with a summary of the principal advantages of this asset and the major strengths of this company against the competition:

  • Firstly, we should of course note here the investments completed by Intel in research and development. It should be remembered that the group exercises its activities in the technological sector and therefore must be at the innovative forefront to remain competitive, develop new products and thereby respond to new market requirements.
  • Still relating to the strong points of the Intel Company we should also note the fact that this group remains one of the leaders in the world of semi-conductors and micro-processors. Its long experience in these areas as well as its knowledge have enabled it to stand as a reference in this sector and benefit from a strong brand image with consumers and IT manufacturers.
  • It is also important to underline the quality of Intel’s strategy notably concerning its international development. In fact, the group has succeeded in creating a strong and precise expansion strategy which now enables it to be present on all the markets around the world. This particularity also enables it to protect itself effectively against the risks of economic recession in certain places through the diversification of its revenue sources.
  • Of course, concerning the advantages of this group we should also note the commercial links that this group retains with its partners and its clients. The company actually maintains a loyalty policy that is based on its complete range of products and a specially adapted pricing policy.
  • Finally the brand image of Intel is another of this company’s strong points. In fact, this company is known worldwide and its brand is synonymous with quality and reliability which notably enables it to face its lower priced competitors in this sector.
Negative factors for Intel shares
The factors in favour of a drop in the Intel share price:

Of course, as you probably realise, the Intel Group does not only have strong points and advantages, it also has a few weaknesses that could impede its ability to develop and gain new parts of the market. Here as follows are the major weak points of this company:

  • Firstly, we should of course point out our disappointment that the Intel Group is still only present in the PC sector nowadays. In fact, by entering other types of IT device sectors the group could gain enormously. However, maybe this type of specialisation is a strategic choice.
  • Still relating to the major weak points that could harm the Intel Company, we should also mention the competition. This is increasing strong and numerous and indeed even aggressive in this activity sector and the arrival on the market of new competitors from the emerging countries that propose cheaper alternatives to the products available from the Intel Company represent a real threat for the income and market share of this company.
  • We can also point out for this analysis of the weak points of the Intel Company the fact that it does not seem to create long lasting strategic partnerships with the aim of increasing its competitiveness, notably relating to suppliers as well as its clients in the IT sector.
  • Another weak point of the Intel Company also concerns the low diversification of its activities. Contrary to certain of its major competitors, the group completes only a few strategic operations in this manner such as acquisitions or the purchase of shareholdings that enable it to take a strategic position in different sectors.
  • Finally, the last weak point of this company, or its value on the stock market, relates to its share price which is reasonably high on the stock markets with a dividend strategy that is fairly stable but not overly attractive to new investors.

As you may have observed, the factors to take into consideration for this comparative analysis of Intel’s strong and weak points are numerous. You should also review these factors over time as the advantages and disadvantages of this group may vary according to decisions taken and changes that could occur.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

Who owns the capital of Intel?

As is often the case with listed companies, Intel's capital is partly owned by private shareholders including The Vanguard Group at 8.07%, Capital Research & Management at 4.72%, SSgA Finds Management at 4.41%, Capital Research & Management Co (World Investors) at 3.18%, Capital Research Management Co (International Investors) at 2.99%, BlackRock Fund Advisors at 2.49%, Capital Research & Management Co (Global Investors) at 1.98%, Putnam at 1.89%, Wellington Management at 1.66% and Geode Capital Management at 1.51%.

On which market and which main stock market index is the Intel share listed?

Intel's share price is of course quoted on the Nasdaq market and more precisely on the Nasdaq Global Select Market which is the market grouping together the listings of technology companies in the United States as well as certain foreign companies in this sector of activity. We also know that Intel is part of the composition of the Nasdaq 100 stock market index which groups together the largest capitalisations in this sector.

How do you know if Intel's share price will rise?

Some fundamental analysis data can help you detect upward trends in this value in advance, such as the establishment of new partnerships, the development of innovative technologies, the signing of major contracts or the acquisition of subsidiaries in various sectors. Technical analysis will of course also be used for this purpose.

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