Published on 22.03.2024

Intel Stock

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Intel stock price

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Intel's IPO

In 1971, just three years after its founding, Intel became publicly listed on the Nasdaq [ticker INTC, ISIN code: US4581401001]. The initial offering price was $23.50, and the company raised $8.2 million. Intel is included in the NASDAQ-100 index.

Corporate strategy and future

Intel aims to continue providing the most and best semiconductors in a world that is increasingly becoming more and more data driven. For this reason, it has shifted from a PC-oriented company to one that increasingly focuses its product offerings on data traffic. In recent years, Intel has expanded its production capacity for advanced processors significantly to maintain a competitive edge against companies like AMD and NVIDIA.

Additionally, Intel decided to take their company Mobileye public. Mobileye specialises in software and sensors for self-driving cars and systems that facilitate and enhance driving. The IPO was launched in 2022 and raised $861 million.

Intel is also expanding its activities in other data-oriented areas, such as The Internet of Things (IoT) and artificial intelligence for healthcare and education.

From a PC company to idealistic data enterprise

The shift of Intel's activities from PC-focused to data-focused is a common trend observed in competitors like NVIDIA and AMD. The physical PC market seems to have reached its limits and stagnates, while the cloud market is still in its infancy and holds tremendous potential. However, this transition process is slow. At Intel, over much of the activities are still related to PCs and physical data storage. Through Intel's Client Computing Group, the company serves the market with increasingly advanced microprocessors. Nearly 37% of the activities are dedicated to data centres and cloud products. Intel manufactures platforms for storage and network functions. There are also smaller but promising activities. With the IoT, Intel enables data exchange through internet connections between ‘smart’ equipment of various companies directly, without human intervention. Users include retailers, manufacturers, hospitals, researchers, governments and educational institutions. Finally, Mobileye's processors and sensors target fully autonomous Robotaxis and computer-assisted features for private cars.

As is the case for competitors like NVIDIA, Intel sees itself as a pioneer of an exciting development in which it extensively exploits the power of data. The company’s ultimate goal is to improve life on Earth for everyone. The aim is for the IoT to simplify and enhance life, improve the efficiency and effectiveness of healthcare and education and reduce environmental impact by decreasing polluting physical logistics and mobility.

The history of Intel

Intel was founded in 1968 by experienced tech engineers Robert Noyce and Gordon Moore. The original playful name Moore Noyce (pronounced as ‘more noise’) was soon changed to Intel, derived from ‘INTegrated ELectronics'. The company is headquartered in Santa Clara, located in the renowned Silicon Valley. Intel quickly became a symbol of the hyperbolic growth of Silicon Valley as a high-tech centre. Gordon Moore's ‘Moore's Law’, a famous prediction that the number of transistors on a chip would double every two years, indicating the rapid pace of chip development, contributed to this image. Although Moore's prediction was based more on practical experience than scientific research, it has proven fairly accurate so far.

Initially, Intel manufactured modern computer memory based on semiconductors (chips) before transitioning to microprocessors in the 1970s, driven by the rise and success of personal computers. In 1981, IBM started using Intel processors in its PCs, marking the beginning of a period of unprecedented growth for Intel. The company installed clones of its processors in numerous PCs from other computer brands. For the consumer market, especially Microsoft, Intel developed the well-known Pentium microprocessor, which significantly enhanced the capabilities and speed of PCs. Under the leadership of the renowned former CEO Andrew Grove, who created strong customer loyalty to the brand with slogans like ‘Intel Inside’, revenue grew substantially. During this period, Intel's stock, which was now publicly traded, increased in value fifteenfold.

Intel quickly aimed to establish a dominant position in the PC market and sometimes employed less-than-sportsmanlike methods to achieve this. In 2008, the European Commission suspected the company of abusing its dominant market position in Europe following a complaint from AMD, Intel's largest and increasingly strong competitor. European Commissioner Neelie Kroes imposed a fine of €1.06 billion, the highest fine for abuse of power at that time, given Intel's 80% market share. According to Kroes, Intel violated European rules by deliberately excluding AMD from the market. Intel also frequently clashed with Microsoft over market dominance.

Part of Intel's expansion strategy involves an aggressive acquisition policy. Since 2009, the company has acquired over thirty companies in areas such as computer security, semiconductors, self-driving cars and various software. A significant acquisition was the purchase of antivirus software company McAfee in 2010 for $7.6 billion. Intel aimed to become more competitive in computer security with this move. In 2016, Intel acquired peer company Altera for $16.7 billion.

In March 2018, Intel acquired Mobileye for $15 billion, a system developer for self-driving vehicles with which it already collaborated. With this acquisition, Intel entered competition with rivals like NVIDIA and Qualcomm, that also operate in the self-driving vehicle sector.

The information in this article is not written for advisory purposes, nor does it intend to recommend any investments. Please be aware that facts may have changed since the article was originally written. Investing involves risks (e.g., price volatility, currency or liquidity risk). You can lose your invested funds. Consider your knowledge and experience when making investment decisions. Past performance is not a reliable indicator of future results. Markets are volatile and can fluctuate significantly due to economic, political, regulatory, or other developments.

Sources: Intel, Nasdaq, Delphipages, Reuters

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