Why Did Intel Stock Witness The Worst Crash In Its 50-Year History?

Core Insights - Intel's stock has declined nearly 60% since the start of 2024, with a significant single-day drop of 26% earlier this month, contrasting sharply with the performance of peers like Micron Technology, Nvidia, and Applied Materials, which have seen gains of 21%, 161%, and 25% respectively [1][2] - The company has faced challenges in maintaining its leadership in the global chip market, resulting in a drop in market share and a 34% decrease in revenue per share and a 54% decrease in earnings per share over the last twelve months compared to fiscal 2021 [2] - Despite management's turnaround plans, the resignation of a board member has raised investor concerns, although a modest recovery in revenues to $59 billion and an estimated EPS of $1.34 for FY2024 is anticipated [2] Financial Performance - Intel's stock performance has been volatile, with returns of 6% in 2021, -47% in 2022, and 95% in 2023, underperforming the S&P 500 in 2021 and 2022 [3] - The Trefis High Quality Portfolio has consistently outperformed the S&P 500, indicating that individual semiconductor stocks, including Intel, have struggled to deliver stable returns [3] Future Outlook - Intel expects revenues to remain stable in Q3 FY2024, with potential losses at the operating level, but anticipates a turnaround in Q4, which is typically a strong quarter for the company [3] - Successful implementation of cost optimization initiatives will be crucial for Intel's recovery and return to its fair value level, estimated at $30 compared to the current stock price of around $20 [2][3]