INTC

If You'd Invested $300 in Intel Stock 3 Years Ago, Here's How Much You'd Have Today

Many semiconductor stocks are soaring right now. Over the past three years, for example, Nvidia's stock has skyrocketed nearly 600%.

But what about other chip stocks, like Intel (NASDAQ: INTC)?

Intel's 3-year performance paints a surprising picture

While Nvidia stock has septupled in value the last three years, Intel shareholders have lost roughly 38% of their money. A $300 investment then would now be worth just $186.

What happened? Intel fell victim to a combination of self-created and industrywide challenges. Increased competition caused the company to lose central processing unit (CPU) market share, while a multiyear global chip shortage pressured global sales. As Fool writer Dani Cook explains, these challenges "forced Intel to overhaul its entire model," resulting in a strategy that will prioritize manufacturing and artificial intelligence (AI).

AI, of course, should be a huge focus of any chip manufacturer. It's the biggest reason why Nvidia stock has performed so well. That company's AI capabilities are still well ahead of the competition. OpenAI's ChatGPT was trained using Nvidia A100 processors. Nvidia's next-gen H100 processors, meanwhile, deliver up to 30 times the performance of the A100.

While Nvidia currently has the lead, the AI revolution will take decades to fully play out. If the past is any indication, other chip makers like Intel and AMD will eventually catch up. That's especially true given Intel's pivot to a foundry model, which the company calls "the most significant business transformation in its 55-year history." By revamping its development model and building manufacturing plants in the U.S., management expects to drive significant cost savings with faster innovation.

Will Intel succeed in its turnaround? It's far too early to know for sure. But shares are a relative bargain versus Nvidia. At Thursday's prices, Intel stock traded at 2.3 times trailing-12-month revenue versus Nvidia's lofty valuation of 42 times sales. If you're looking for a bargain turnaround play, Intel is a great pick.

Should you invest $1,000 in Intel right now?

Before you buy stock in Intel, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Intel wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $635,982!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of May 13, 2024

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2025 $45 calls on Intel and short May 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tags

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.