Company Research | Intel

November 22, 2023by Anton Tryhubchenko

Today, we’re going to talk about Intel, whose shares are among the top five growth leaders over the past 3 months.

Over the past 3 months, Intel shares have risen by +33.7%. At the same time, the tech sector, to which the company is a part, grew by +10.1%, and the S&P 500 index by +3.2%.

As you can see, Intel shares show better returns than the sector average. Intel is one of the key players in the semiconductor industry worldwide. The company supplies its products to such tech giants as Amazon, Google, Microsoft, Cisco, Ericsson, Nokia, and the US Department of Defence. In 2022, the three largest customers accounted for 42% of the company’s revenue, namely: Dell – 19%, Lenovo – 12, and HP – 11.

The company operates in the semiconductor industry. It was founded in 1968. In 1971, it was listed on NASDAQ and in 1976 was included in the S&P 500 index. For the past 7 years, the company has been headed by Pat Gelsinger and a team of qualified managers.

Intel’s main competitors are Nvidia, AMD and Micron Technology. As you can see from the table above, some of them are ahead of Intel in terms of capitalization, but the company has a few competitive advantages. Intel’s strengths are based on the vertical integration of its production process. Unlike most competitors, such as TSMC or Samsung, Intel owns a significant portion of its fabs and research centers. This allows for strict quality control, rapid introduction of new technologies, and greater resilience to supply chain disruptions. As the industry often faces supply shortages and is very sensitive to the geopolitical situation, having its own production facilities provides the company with a certain degree of insulation from external factors. In addition, wide geographical diversification allows Intel to save on the cost of each chip produced through economies of scale.

In Intel’s latest annual report for 2022, 57% of the revenue structure is made up of manufacturing costs and 43% of gross revenue. Last year, the company made a profit of $8B. And its market capitalization is now $184B.
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