Opinion: I’ve always pounded the table on revolutionary companies. Now I’ve found myself buying Intel’s stock

This may be a surprise for those of you who have been following me on MarketWatch, as I have focused on finding Revolutionary companies early on and holding on to them, usually forever.

Intel is a company that is probably about to take market share for the first time in at least half a decade in the world’s most important technology industry: computer chips.

The semiconductor industry is facing a potential decade-long supply-constraint problem that this company can fix, giving it a potential trillion-dollar side business along with maybe another one or two.

And the kicker is the valuation: Intel is trading at a forward price-to-earnings ratio of 14.2, compared with a forward P/E ratio of 26.1 for competitors Advanced Micro Devices Inc.
AMD,
-1.05%
and 46.7 for Nvidia Corp.
NVDA,
-2.10%.
Intel also has a dividend yield of close to 3%.

Two more comparisons — the SPDR S&P 500 ETF
SPY,
+0.28%
trades for 19.7 times forward earnings and the Invesco QQQ Trust
QQQ,
-0.19%
(which tracks the Nasdaq-100 Index
NDX,
+0.15%
) trades at a forward P/E of 26.

Most investors think Intel is boring. I agreed until recently. INTC has been dead money for years. I would imagine that with Intel having been trading in the low teens P/E and with dividends of 2%-3% over the last 10 years while vastly underperforming just about every other semiconductor stock on the planet, just about every value investor has churned in and out of the stock at some point.

We can say the same thing about the sell-side analysts, most of whom at one point or another have upgraded INTC only to be disappointed when the stock basically went nowhere. In fact, Intel’s stock is still way below its dot-com bubble peak, when it hit a closing high of $74.88 on Aug. 31, 2000.

Intel’s long-term problem

Intel’s boring, old CPU semiconductor business has been losing market share to AMD and self-designed chips by Apple Inc.
AAPL,
-0.17%
and Google (held by…

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