Intel Corporation (NASDAQ: INTC) The stock took another hit in Monday trading. The semiconductor company’s shares ended the day down 6.4%, according to data from S&P Global Market Intelligenceat the same time, Standard & Poor’s 500, Nasdaq CompositeAnd Dow The indices closed the trading session down 3%, 3.4% and 2.6% respectively.
After a brutal sell-off last Friday, Intel stock lost ground again today amid a broader market pullback in reaction to Trading using the Japanese YenThe chip company’s stock price is also likely to be negatively impacted by bearish research notes from analysts following last week’s highly disappointing second-quarter report.
Monday was a bad day for Intel and the broader market.
Intel stock hit a 10-year low on Monday, but it wasn’t the only company to see a big valuation contraction. The broader market fell on the selloff and concerns about risks associated with the “pregnancy tradeStrategies using the Japanese yen. Because of the country’s low interest rates, some investors have been borrowing the country’s currency and then pumping it into the “Magnificent Seven” and other growth-oriented stocks.
But the risks associated with this trade have recently risen, causing a broad sell-off. On July 31, the Bank of Japan raised its benchmark interest rate from 0.1% to 0.25%—making it more expensive and risky to borrow money and put it into stocks. Recent turmoil in the valuations of big tech companies has also pushed up the risks associated with this strategy, and the surge in related stock sales has compounded the effects.
What’s next for Intel?
With today’s drop, Intel’s stock is down 60% in 2024 trading and 71% from its 10-year high. The company could face a tough road ahead.
Intel’s second-quarter report pointed to major structural issues across the business. While it was already widely understood that the company was planning a turnaround to improve its position in AI and data center opportunities, the latest earnings release suggests the chipmaker is at an earlier stage of its comeback initiatives than previously thought.
To help with new cost-cutting initiatives, Intel has announced it will lay off about 15% of its workforce and suspend its dividend. But the company is scaling back and restructuring at a time when competitiveness in AI and other trends is becoming increasingly important.
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Keith Noonan He has no position in any of the stocks mentioned. The Motley Fool recommends Intel and recommends the following options: Buy $45 shares in January 2025 on Intel and Sell $35 shares in August 2024 on Intel. The Motley Fool has Disclosure Policy.
Why Intel Shares Dropped Again Today Originally posted by The Motley Fool