While Intel does not have the technology swag as the FANTAG stocks, recent developments have made it sexy again, reports Joe Duarte.
Shares of Intel Corp. (INTC) delivered a breakout on June 5 as laptops and cloud chip demand increase. Moreover, what makes this stock interesting is that the stock has shrugged off the expectations of major losses after the U.S. government stopped U.S. chip companies from trading with China’s Huawei.
Anyone who’s followed Intel over the years knows that its heyday was in the early days of the Personal Computer and the laptop, circa 1990. Since then, even though the company is a major player in the semiconductor space, there just hasn’t been much glamour associated with their worker bee chips, which power such mundane tools. So, the stock has mostly bounced around (see chart below).
But the world has changed and what was mundane yesterday is suddenly necessary and sexy today. This is especially true for Intel, as more people work from home and laptop sales are likely to rise.
Moreover, those laptops are going to have to be faster and will be expected to be more portable, more secure and more versatile, especially when connected to Wi-Fi. Furthermore, chip demand is already exploding as cloud companies expand their server capacity in response to the changing global environment – 5G, increased bandwidth requirements, more sophisticated networks and more reliable connectivity.
Finally, with a P/E ratio near 12, positive recent guidance, a steady dividend and positive money flows as documented by Accumulation Distribution (ADI) and On Balance Volume (OBV), the stock looks poised to move toward $70 in the next few weeks.
I own shares in INTC.
For an in-depth look at how I got here and how I analyze the markets check out my May 25, 2020 interview with Stockcharts.com’s David Keller on his show “Behind the Charts” on StockchartsTV. To subscribe to my service, click here.
