Bet on the Chip Leaders… Intel (INTC)
Posted on Tuesday, February 10th, 2009 | In Contrarian PerspectivesBet on the Chip Leaders… Intel (INTC)
There is a maxim which states companies that spend more on development and advertising during economic downturns, rise become leaders when then markets turn around. And it’s true.
Much of the reason behind this is that prices plummet during downturns: business investment – of any kind – can be done incredibly cheap compared to “normal” periods. Being a buyer when everyone else is selling has a simple benefit – you get great deals.
Intel Corporation (Nasdaq: INTC) has been one of the most public in its business investments. Today it’s detailing how it will spend $7 billion over the next two years on new chip manufacturing and development in the United States.
When you consider that a semiconductor chip manufacturing plant can cost in the neighborhood of $1 billion and take years before they show profits, these investments are not taken lightly.
But Intel isn’t alone. Cisco Systems (Nasdaq: CSCO) has been on an acquisition spree, picking up seven companies over the past year. Fueled in part by is $30 billion cash war chest, Cisco has been refinancing its debt.
Like Microsoft (Nasdaq: MSFT), these large cash reserves benefit Cisco and Intel by giving them flexibility in financing, and the ability to acquire competitors with new technologies.
These “chip leaders” in the poker game of the stock market should be able to press their advantage. And ultimately, benefit their investors.
Companies mentioned in this article: INTC, CSCO and MSFT.
Last 5 posts by Investment U
- Doctor Up Your Portfolio With This Medical Communications Company - November 6th, 2009
- Dendreon’s Reached Orbit… Now Who’s Next? - November 6th, 2009
- Dendreon Corp. (Nasdaq: DNDN): Put These Two Promising Biotech Stocks on Your Watch List - November 6th, 2009
- Beware This Tech-Tonic Shift In The Global Technology Sector - November 5th, 2009
- Is Warren Buffett Signaling a Housing Recovery? - November 5th, 2009
Cisco Systems, Contrarian Perspectives, Intel Corporation;, InvestmentU, microsoft, semiconductor chip;, United States, USD
 About Investment U (http://www.investmentu.com)
Everything You Want To Know About Investing, But Don’t Trust Anyone Enough To Ask It’s a shame, really, that much of what is offered here - at no charge - is not taught in the public schools. Why is it that you can graduate in the top of your high school class and know next to nothing about credit card debt, adjustable-rate mortgages, or 401(k)s? Founded in 1999, the goal of Investment U is to give you impartial, no-nonsense advice on how to build long-lasting wealth. Our mission is to analyze and discuss all the important financial tools at your disposal. And to make sure, too, that you use them effectively to jump-start your net worth, cut your investment costs dramatically, reduce your risk profile and, most importantly, achieve and maintain total financial independence. It’s the latter point that is truly our goal here at Investment U. Because no one has the opportunity to live his life fully if he’s a slave to his job, his financial obligations, or his overhead. Or, worse, if he’s worried he won’t be able to maintain a comfortable retirement… or leave behind some kind of legacy. |
No recommendations, either expressed or implied, are being made to buy, sell, hold or short any of the mentioned stocks. No legal, tax or accounting advice is expressed or implied. Always contact your attorney, CPA, or tax advisor before acting on any legal or tax issues. StraightStocks.com is not responsible for the content, products, or services of any of the advertisers on this site. StraightStocks.com receives compensation from advertisers on this blog. Services and products referred to herein are trademarks, registered trademarks, servicemarks, and/or registered servicemarks of their respective trademark or servicemark owners.