Intel Corporation has been a major innovator and driver of the latest information technologies since the late 1960s. The company has evolved to become the world’s largest manufacturer of integrated circuits, motherboard chipsets and network interface controllers. Intel supplies processors to computer manufacturers such as Apple Inc., HP, Dell and Lenovo, to name only a few. As a tech stock, Intel is a cyclical stock that typically experiences more price volatility than stocks in other economic sectors.
Main Takeaways: How to Buy Intel Stock
- Pick a broker. We recommend Webull, E*TRADE or Ally Invest.
- Open a demo account. Trade with virtual money before fund your account.
- Fund your account. You usually can fund your account using a bank transfer, card or physical check.
- Place an order for Intel stock.
All About Intel: Company and Stock History
Intel Corp. was founded in 1968 in Santa Clara, California. The company originally began making memory chips and was responsible for creating the world’s first metal oxide semiconductor. Intel’s initial public offering (IPO) happened in 1971 by selling shares at $23.50 on the Nasdaq Exchange, and the company’s stock has since gone through 13 stock splits.
In 1993, Intel introduced the Pentium microprocessor, which marked a major expansion for the company by providing microprocessors for a number of PC manufacturers. Between 2009 and 2019, Intel bought 24 different companies that specialize in security, software, wireless, recognition and other technologies, which continued fueling the company’s expansion.
Although Intel stock has come a long way from its original IPO price given all the stock splits, its ascent has not been straight up due to a number of factors. Adverse influences include the dot.com bubble, competition from other chip makers, flaws in some of their products and antitrust issues, which have all put pressure on Intel stock’s price at some point in its history. The stock’s biggest move took place in September of 2000 during the dot.com boom’s bubble burst, when INTC stock dropped -44.9% from its all-time high of $75.69 per share to $41.56 per share.
Future Outlook for Intel
Intel stock currently trades at the $47 per share level and is a component of the Dow Jones Industrial Average, as well as the NASDAQ 100 and 500 indices. The stock has had a roller coaster ride, especially since 1999, when the stock rallied sharply during the dot.com bubble, only to subsequently lose three-quarters of its highly inflated market cap in the ensuing downside correction.
In the last 10 years, Intel stock traded as low as $12.50 in January of 2009 in the wake of the 2008 global financial crisis and up to a high of $59.59 per share that it achieved in April of 2019. In addition to INTC stock trading cyclically with the rest of the stock market and business cycle, the stock’s price is strongly affected by world semiconductor demand, current tech innovations and the position and market share of its competitors in the industry.
Most recently, Intel’s stock price has been pressured by the company’s delay in releasing its new 10 nanometer CPU chip. Intel’s 10th generation 10nm Core i7-1065G7 CPU chip unveiled on May 28, 2019 at the Computex Show that it beat competitors’ AMD and Ryzen’s latest chips in overall performance. Many analysts believed that the release of the chip would be too late to defend its market share from AMD’s new 7nm chips.
Despite that release delay, Intel’s new CPU chip has outperformed its closest competitors and has already started shipping. The chip features a number of architectural improvements, as well as a new integrated CPU with Gen 11 graphics that will appear in devices by the end of 2019. Intel also announced the release of its new Core i9-9900KS 5Ghz 8-core all-core processor and its next generation of Core-X series processors, which is expected by the fall of 2019.
Furthermore, Intel’s financial results for its first quarter 2019 were released on April 25, 2019. The company reported revenue of $16.1 billion, which was flat year on year (YOY). Net income came to $4 billion versus $4.5 billion in 2018’s Q1, showing a decline of -11%, while generally accepted accounting principles (GAAP) earnings per share (EPS) were $0.87 compared to the $0.93 result seen in the same period last year, showing a decline of -6.5%.
Since the analyst consensus was for EPS of $0.81 per share on revenue of $16.0 billion, this result was favorable. In addition, Intel generated about $5 billion in cash from operations, repurchased 49 million shares of stock for which it paid $2.5 billion and paid dividends of $1.4 billion to shareholders. Due to the stock repurchase, the company’s outstanding share count was reduced by 4.7%.
Due to its first-quarter results, Intel downwardly revised its outlook for the second quarter and full year. Intel expects Q2 revenues to fall about -8% YOY to $15.6 billion, with GAAP EPS of $0.83, a drop of -21% compared to 2018’s second quarter. Full-year revenues are now expected to be $69 billion compared to January’s guidance of $71.5 billion. =
Intel stock currently trades at a price/earnings (P/E) ratio of 10.8, which is extremely low for a tech company. The low P/E indicates that the price of the stock could be undervalued if no other factors are considered. One reason for the low valuation of Intel stock could be the market’s perception of Intel’s difficulty competing with Advanced Micro Devices (AMD) and Nvidia in the latest generation of the chip market.
Despite Intel’s revised Q2 and full year guidance, results may improve now that the company has begun shipping its new 10nm CPU chips. Furthermore, some analysts think the stock’s valuation should be more like $57 to $62 per share due to its low P/E and current financial position. Nevertheless, with the stock market currently at all-time highs, Intel’s stock has had a less-than-stellar rally.
Why You Might Want to Buy It
- Leader in a volatile industry: Despite competition from other semiconductor manufacturers, Intel has the advantage of technical innovations, market share and customer base. If the assessment of some analysts is correct, then Intel stock at current price levels could be an excellent opportunity for investors.
- Historically undervalued: Intel stock only trades at roughly 11 times earnings, while the average P/E ratio for the industry is closer to 30. INTC’s forward P/E is 10, which means that the stock could be undervalued by as much as 20% to 30%.
- High dividend yield: Intel currently pays a yearly dividend of $1.23 per share, which works out to an annual yield of 2.68% with the stock at current price levels. The dividend yields a slightly higher rate than a Treasury note and might be an incentive for long-term investors looking for income.
Considerations Before You Buy
- Possible future stock market and economic downturn: Intel could decline significantly during a market downturn. The company has already downwardly revised its full-year guidance and, depending on the number of new products like the 10nm CPU chips the company sells, revenue and earnings could begin to decline.
- Highly competitive environment: Intel’s 10nm chips already compete with AMD’s 7nm. Also, Nvidia and Qualcomm are set to compete in the Adaptive Driver Assistance Systems (ADAS) market, which is already dominated by Intel’s Mobileye. This could cost Intel even more of its market share in the industry.
- Flaws in products: In January of 2018, 2 security vulnerabilities, known as Meltdown and Spectre, were detected that affect Intel x86 and AMD microprocessors, IBM power processors and several Advanced RISC Machine (ARM)-based microprocessors. Meltdown takes advantage of a condition inherent in the design of the affected CPUs and allows a process to run that bypasses normal privilege checks and gains access to the computer’s operating system and other processes.
The Spectre vulnerability tricks a program into allowing it access to arbitrary locations in the program’s memory, which gives the attacker access to stored memory that could contain sensitive information. As of 2018, these 2 vulnerabilities affect all computer systems, including laptops, desktops and mobile devices with Intel, AMD, IBM and ARM-based microprocessors.
Intel and Microsoft have addressed these issues with patches and software mitigation, potential security problems with the 2 vulnerabilities which could put many people’s information at risk. This keeps significant pressure on Intel’s stock price, which could explain its existing apparent undervaluation.
How You Can Buy Intel Stock
Intel stock can be bought through any reputable stockbroker with access to trade stocks on the Nasdaq (NASDAQ) exchange. If you plan to buy Intel stock for the long-term with a goal of capital appreciation and dividend income, then you might want to open an account with a discount broker. You’d save on commissions when you pick a discount broker, but you probably wouldn’t get access to extras like research that you might get from a full-service broker.
Brokers with an online presence offer different services and fees. For example, some brokers charge customers an inactivity fee for idle accounts, while financial platforms such as Webull offer stock brokerage free of charge. Keep in mind that how you buy Intel stock is just as important as the broker you choose, so make sure you pick the right broker for your situation.
Step #1: Pick a Broker
Know your needs: Some brokers offer advanced trading platforms, access to international markets and other tradable assets. Other brokers provide educational material for clients with limited experience. Certain brokers might able to fill your needs better than others, so determine what your needs are before you choose.
Here are some of our favorites.
|Broker||Best For||Commissions||Account Minimum||Choose your platform|
Get started securely through Webull’s website
1 Minute Review
Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit. Webull is widely considered one of the best Robinhood alternatives.
||$6.95 for fewer than 30 trades/quarter.||$0||
Get started securely through eTrade’s website
1 Minute Review
E-Trade is best known for its user-friendly browser, desktop and mobile trading platforms and its extensive research and educational information. E-Trade may not have the lowest commissions compared to discount online brokers, but customers certainly get their money’s worth from E-Trade’s comprehensive offerings.
60 days of commission-free trades with deposit of $10,000 or more
||$4.95 volume discount available||$0||
Get started securely through Ally Investment’s website
1 Minute Review
If investors are on the hunt for a bargain broker, Ally Invest could be the one. With low commissions across the board, Ally Invest (formerly TradeKing) stops potential investors in their tracks with its especially low mutual fund commissions. Commissions on stocks and ETFs are notoriously inexpensive as well, and for more active traders or those with larger account balances, commissions can dip as low as $3.95 per trade.
$3.95 per stock trade for Active Traders at Ally Invest
Step #2: Open a Demo Account
Many online stock brokers offer a risk-free virtual or demo account so you can trade with virtual money, which provides a great way to assess a broker’s trading platform and execution services. Opening several of these accounts with different brokers will give you insight into their services and help you in your selection.
Step #3: Fund an Account
Once you’ve picked a broker and have had the chance to assess its platform, you can now fund your account to make your Intel stock purchase. Methods you can use to fund an account can vary from broker to broker, so make sure you meet all of the requirements for funding an account with your chosen broker.
Step #4: Start Buying Intel Stock
Once you have opened a live account with a broker, it’s now time to buy your INTC stock. Ideally, you could watch Intel stock to determine an optimum buying price using technical analysis. Place an order at the price and for the amount of stock you wish to purchase.
Is Intel Stock for You?
Tech stocks generally trade in a volatile manner, so if you don’t like roller coasters, you might want to pick a more defensive economic sector to invest in. Nevertheless, if you aren’t very risk-averse and have a positive outlook on both the U.S. economy and Intel’s business, then Intel might be a good investment since it has a low valuation relative to the rest of its sector.