Buying Intel stock on today’s news doesn’t make much sense.
Intel (INTC +10.16%) stock is surging on Black Friday morning. Shares of the struggling semiconductor company are up 6.4% through 10:35 a.m. ET.
And no one seems to know why.
Image source: Getty Images.
Intel vs. TSMC
Oh, there’s news on Intel, but it’s not “good news” — not something you’d expect to drive a $180 billion-plus stock higher. On Wednesday, Reuters reported that Taiwan Semiconductor Manufacturing Company (TSM +0.54%) is suing Intel to block the hiring of an ex-TSM vice president, Mr. Wei-Jen Lo.
TSMC worries “there is a high probability that Lo uses, leaks, discloses, or transfers TSMC’s trade secrets and confidential information to Intel.” In demonstration of how seriously TSMC takes this matter, The Wall Street Journal reports a criminal investigation has been launched in Taiwan.
Investigators have raided Lo’s residences in Taiwan and “seized evidence, including at least one computer, as part of an investigation into whether Lo improperly transferred technology related to national security,” reports WSJ.
Today’s Change
(10.16%) $3.74
Current Price
$40.55
Key Data Points
Market Cap
$176B
Day’s Range
$37.35 – $40.59
52wk Range
$17.66 – $42.48
Volume
3.5M
Avg Vol
109M
Gross Margin
35.58%
Dividend Yield
N/A
Is Intel stock a buy?
Intel naturally disputes TSMC’s allegations and says “we have no reason to believe there is any merit to the allegations involving Mr. Lo.” Whoever’s in the right on the legal merits of the case, though, the fact that TSMC is suing Intel doesn’t seem a good reason for its stock to go up.
Nor does Intel look like much of a buy, even with Lo on board.
Valued at $187 billion in market cap, Intel has turned technically profitable, and analysts expect its profits to grow in future years. The stock’s still burning more than $8 billion in cash a year, however, and positive free cash flow is still at least a couple years away, according to analysts polled by S&P Global Market Intelligence.
Intel stock is still a sell for me.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intel and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: short November 2025 $21 puts on Intel. The Motley Fool has a disclosure policy.
