It is not surprising that Intel shares are not doing so well at the moment, given recent developments. (Image: stock.adobe.com – m.mphoto)
Chip manufacturer Intel is currently struggling with a number of problems, as was recently made clear by the announcement of the planned layoffs of more than 15,000 employees.
Just a few hours before the announcement of this drastic measure, a Reddit member posted a Forum post about his most recent major investment: the purchase of $700,000 worth of Intel stock.
Who is the person and where does he get so much money? According to his own statements, he is a student. He claims to have inherited the large amount of money from his grandmother, who died two months ago.
This is how quickly a sharp drop in the price can turn a market value of just under 700,000 dollars into a market value of less than 500,000 dollars. (Image source: Reddit user Sad_Nefariousness10)
- The dimension of the crash: After it became known that Intel was laying off a lot of employees, the share price plummeted from around 28 dollars to under 20 dollars, which you can also see in the picture above.
- The parents do not find out at first: In a Follow-up post on Reddit The next day, the student stated that he had not yet told his parents about it. This is understandable considering the loss of about a third of his inheritance.
- The student has long-term goals: After all, he stated in his first Reddit post that he wanted to hold the shares for ten years. However, the sharp drop in share prices shortly after his large investment was certainly a bit of a shock.
The response is huge: His first forum post already received over 26,000 upvotes and more than 11,000 comments.
The follow-up post has currently exceeded 46,000 upvotes and 8,800 comments.
Could it be a fake? This can never be ruled out with Reddit posts, but the story seems authentic to us.
- On the one hand, this is due to the timing and content of the first article, which goes into the reasons for buying Intel shares in relatively great detail.
- On the other hand, even after taking a closer look at the Reddit user’s account and other comments, we see no reason to doubt his story.
But there is no complete certainty.
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How Intel shares have performed previously
- At its peak in the early 2000s, Intel shares were at times worth over 150 dollars, as can be seen in the picture below.
- After a low in 2009 in the range of under 10 dollars, Intel fought its way back up until around 2020, more precisely to the 50 euro mark.
- At the end of 2022, a low point was reached again at the 25 euro mark. In 2023, the trend then clearly pointed upwards again.
- The first major crash this year occurred around April; from almost 40 dollars down to just 30 dollars. After that, the situation seemed to stabilize – until the bad news of mass layoffs came.
Intel’s share price has never been able to return to its peak in the early 2000s.
The student with the large inheritance gives the following reasons for his trust in the stock, among others:
- Intel’s strong investments in domestic semiconductor chip production and research.
- The possibility that potential customers such as AMD and Nvidia will have to (or want to) switch from the world’s largest contract manufacturer, TSMC from Taiwan. The reason for this is the increasing tensions between China and Taiwan.
- Intel’s AI accelerator Gaudi 3AI, which the student considers to be very promising, even in comparison with hardware from AI market leader Nvidia.
Also interesting: There are angry reactions from the US because Huawei has done it again: bringing laptops with Intel processors onto the market
Regardless of the points mentioned above, the last time Intel shares were worth as little as they are now was about ten years ago.
Whether the Reddit user’s hope that things will look much better for Intel (and thus for its investment) at the end of the next ten years will come true remains to be seen.
