Next week for stocks: Intel is the biggest loser in the Dow

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Semiconductor in everything. Our phones, our laptops, our televisions. Even our cars. But Concerns about a global recession Concerns persist lack of supplies Stemming from continued pandemic-related shutdowns in Asia over the past two years, major chip companies are hurting.

Intel shares

It’s down 45% this year, making it the biggest dog in the world daw. Intel Corporation

Struggling despite well-advertised plans for Build more factories in the US And hire more at home. President Biden even if Toured the new Intel

(INTC) Facility in Ohio for the groundbreaking ceremony.

To be fair, Intel isn’t the only chip company that’s going through rough times this year.

Shares of Nvidia’s semiconductor competitors

and AMD

Both are down more than 50%. Supply chain problems and concerns about a rapid economic slowdown are weighing on the entire sector. Philadelphia Semiconductor Standard Index

or SOX as it’s known on Wall Street, fell nearly 40% in 2022.

But Intel has been lagging longer. The stock is now trading at its lowest level since May 2016. The stock is down more than 25% in the past five years while SOX has more than doubled, Nvidia is up nearly 200% and AMD is up more than 400%.

Can new CEO Pat Gelsinger (who took over in 2021) upend Intel? Investors may give Gelsinger more time to get the company back on the right track.

How long is unclear though. Gelsinger’s predecessor, Bob Swan, was CEO for just over two years. Swann took charge of Brian Krzanich, who step down in 2018 After revealing a “previous consensual relationship” with an Intel employee.

One of the fund managers who own the stock believes Gelsinger will be able to return Intel to its former glory. But he said it will take some time and investors don’t need to rush into stocks just yet.

“I don’t think there is a sense of urgency to buy. In the long term, I think Intel will fix things,” said Jeff Travis, portfolio manager at Oak Associates Funds. Travis owns Intel in the Red Oak Technology Select fund.

Travis believes that semiconductor stocks are still a good “secular growth industry” and that valuations are attractive now given how sharply the stocks have fallen.

He said chip equipment companies KLA, Kulicke and Sofa

which sells products to major semiconductor manufacturers, and Ambarella

which uses video processing chips in cars, is one of the best choices.

Is the worst over for these and other semiconductor companies? Goldman Sachs analysts don’t think so. They cut their revenue and profit estimates on Friday for Micron . memory chip leaders

which will report earnings on Thursday, and Western Digital


Analysts noted a string of negative data points in the industry, noting cautious demand comments from Intel, AMD and Nvidia in recent weeks. Goldman analysts added that there is “vulnerability across the PC, enterprise server, and smartphone end markets.”

So it may soon be possible to set a lower level for major chip companies yet.

September Historically the worst month for the stock market. This September proves to be no exception.

The Dow is down more than 6% so far this month and not far from a 52-week low. This follows a drop of more than 4% in August. The Standard & Poor’s 500 And the Nasdaq Its performance was worse, dropping by 7% and 8%, respectively.

Could the market rebound in October, though? The month ending Halloween certainly has a bad reputation for being a scary month for traders. Wall Street saw some historic drops in October. Think 1929, 1987 and 2008 for example.

But massive sell-offs in October are actually anomalies. Stocks often enjoy a solid year-end rally, as investors bet on healthy earnings growth and strong consumer spending during the holidays.

Retail Recently, powered by Significant drop in gas and oil prices Helping to pump more money into consumers’ pockets. So there are hopes that Americans will continue to shop, especially since job market Still strong as well. It should boost corporate profits.

The turmoil in global markets, particularly due to inflation, continues to drive big companies like FedEx

to issue Warnings about their earnings and the economy.

Most of the major companies will announce their third-quarter earnings in October… that means they may also provide updated forecasts for the fourth quarter and provide some first glimpses into what they expect to see for sales and earnings in 2023.

Analysts have already lowered their third-quarter forecasts considerably in the past few weeks. According to data from FactSet, Wall Street now expects earnings growth of just 3.2% for the third quarter.

If they need to start lowering estimates for the end of this year and next year as well, that could push stocks even lower.

“There is more downside risk for US stocks,” said Luke Tilley, chief economist and head of asset allocation and quantitative services at Wilmington Trust Investment Advisors.

Monday: Germany’s GDP

Tuesday: US standing orders; US Consumer Confidence; US New Home Sales; Profits from Jubail

United Natural Foods

and blackberry


Wednesday: US pending home sales; Earnings from Cintas

and Paychex

(paying off)

Thursday: US GDP (3rd estimate for the second quarter); US Weekly Unemployment Claims: Porsche goes public; Earnings from CarMax

rite of aid

bed bath behind


and micron

Friday: End of the third quarter. Inflation of personal consumption expenditures in the United States; US personal income and spending; US Consumer Confidence from Michigan; China PMI; Interest rate decision in India; Earnings from Evergrande

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