By Tamanna Desai,
Money and Investing Writer
Recently Intel’s stock (NASDAQ: INTC) has been decreasing quite a bit and becoming worrisome for investors who have believed in the big corporation ever since it started out.
As technology and innovation reaches to greater heights, there could be a possibility that the big PC giant might not be able to keep up with the fast paced advances other companies and competitors are making. There are two main reasons why Intel has been experiencing a decline.
First off, the PC market has been on a decline and some resources say that the decline could be more than what was expected.
An article on Investopedia said, “Global PC shipments declined by 6.7 percent year over year during the first quarter of 2016… the average selling of price of its PC chips declined by 13 percent”.
This decline has many investors wondering if whether or not PCs are still relevant to the consumer with the increases in smartphone devices and tablets.
With the addition of these devices, consumers tend to use their PCs less often and this decreases in ware and tare helps prolong the life of it.
As a result, consumers are relying on their old PCs and with the free upgrade from Microsoft with the Windows 10 upgrade, consumers are not facing a huge need for a new PC.
Another reason why Intel’s stock is taking a hit is due to the fact that many retailers are halting buys of PCs in a preventive action for their inventory levels. In terms of supply chain logistics, Intel relies on commercial retailers to buy a certain amount of PCs at certain periods in order to maintain their inventory levels and prevent it from becoming too high or too low. However, with the halt of sales, Intel now has to accommodate for this sudden change in sales.
On the bright side, many experts think that as Windows 10 from Microsoft starts to hit its peak, many corporations will begin replacing their Windows 7 PCs instead of waiting until the retirement date of 2020.
There are also rumors that Intel will start to focus more on the cloud computing sector.
According to talkincloud.com, Intel is moving forward with the cloud and Internet of Things trends will take up the majority of Intel’s revenue in the future.
In a race to stay as the world’s leading technology corporation, Intel may take drastic cuts and may have to revamp its business structure to meet the high demands of cloud computing and connectivity.
As of right now, Intel’s stock price is $35.11 which is on the closer end of their 52-week high which is $35.40.
Intel may be a possible stock to watch when it comes out with its quarterly earnings report in December.
Their main competitor, IBM is also facing a tough time with sales revenue not meeting expectations. IBM’s stock price is trading at $149.69 which is also closer to their 52-week high of $165.00.
It will be interesting to watch as Intel and IBM try to overcome the draught that they seem to be in.
Although both companies are making significant strides in the cloud computing sectors of their company, it is not enough to overcome the losses that they have. In a race to be the leader, we will just have to sit and watch as both companies battle it out.
A version of this article appeared in the Tuesday, October 25th print edition.
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