$Intel going down.

2019년 11월 12일

At the time of writing, Intel stock, INTC is trading at 58.66. Maybe it will even reach 60, though I don't think it is highly probable. In my opinion, even if it will go up in the short term, within about 1-2 months it will go back to ~50. I am expecting that in 3-4 months, after their next quarterly report, it will drop to the main support, at around 45.

The motivation for this expectation is that the company is quite in a bad spot honestly. The attack from the competition (AMD) on it's CPU division is extremely strong. Everyone knows this, but still they showed good results in Q3, quite unexpected results. Considering that the competition sold it's products so strongly from 7 august until now, makes it very hard to believe Intel had such good earnings. In my honest opinion I think the Q3 results were slightly faked "cookie jar style".

Cookie Jar faking of quarterly reports consists of under-reporting previous quarterly reports, when sales were very good, and over-reporting when sales are bad, in order to prevent destabilization of the stock. This way there is no net fake gain, and thus very hard to prove.

Either way, since the Q3 results, the company has risen quite considerably. What I think that other investors don't understand is that even so, their earnings, as presented, were mainly good because of the enterprise sector. Currently Google and Amazon, a quite significant chunk of the enterprise sector, is changing boat, from Intel to AMD, they have publicly declared this. Most of the reason is that the competition is now more power efficient, better performance and also cheaper. Intel needs to really up their game, and put some money into research. At any rate, for the next 12 months -at the minimum- it will be downhill for them.

In my opinion, their Q4 results will definitely get influenced negatively. I don't understand exactly how the stock is still going up, but I am presuming it has somthing to do with their 11 billion in stock buy-back they plan to do. Artificially maintaining the stock, causing a "bubble" to form. But when a new bad/embarrassing news will hit (AMD benchmarks), like other new products from the competition that cost half the price and perform 20% better, the bubble will pop.

Based on this, I currently have opened a few Sell positions on Intel. If you are pro-intel, after all this, then kudos to you, but in your shoes I would put my stop-losses accordingly.