"Sufficient already," says Intel investor after the final quarterly disappointment


Intel stocks fell last week after the company reported declining demand in its data center business, a segment that generates a third of total revenue.

A longtime Intel investor has had enough.

"How the mighty have fallen," Nancy Tengler, chief investment officer at Laffer Tengler Investment, told CNBC's "Trading Nation" on Friday. "That happens when you try to turn around the Queen Mary. It had two bad quarters. There will probably be another one. "

Intel has exceeded the earnings estimates of the last two quarters. Weak data center demand last quarter and a delay in production of next-generation chips in the June quarter scared investors after these releases.

Shares fell more than 10% on Friday to close at $ 48.20. In the pre-market on Monday it had fallen by almost 1%.

"For me, the numbers aren't the most worrying problem. The numbers weren't that bad – the company has $ 75 billion in sales and $ 3.5 billion in cash. So we know they are paying the dividend." The real problem is the manufacturing problem that just doesn't seem to get any better, "Tengler said.

On the positive side, the company reminds them of the switch from IBM and Apple. For example, when Apple CEO Tim Cook took over, the company moved from a primarily hardware company to one that focused on software and services.

However, Intel investors still have to wonder if waiting for the pain to grow is the right decision, Tengler said.

"What investors need to ask is the opportunity cost – is it worth it? There are plenty of other good places. We don't have this in our growth strategies [portfolio]. We own it in our income strategies and we will look at it again. because it's enough, "she said.

While Tengler is increasingly concerned about Intel's near-term prospects, Craig Johnson, Piper Sandler's chief market technician, said the long-term outlook is intact for investors willing to be patient.

"The long-term trend is still on the up and the trend is still your friend at Intel at this point," Johnson said on the same Trading Nation segment.

For those with a shorter timeframe, Johnson highlighted the most important levels to watch.

"Dealer, you have support at $ 47, $ 45 and then $ 43," said Johnson. "In the past 25 years, there have only been 18 cases where you saw Intel shares fall 10%. Ultimately, you see that shares are down about 2% five days later and about 3.7% 30 days later. been trading higher So look for some rebound here in stocks, you have pretty good support on the downside and the long-term trend is still your friend, "said Johnson.

Disclosure: Laffer Tengler Investments holds INTC.

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Steven Gregory