Intel (NASDAQ: INTC) has struggled in recent years as Nvidia and longtime rival Advanced Micro Devices have begun to surpass Intel technologically. Efforts to bounce back have so far been unsuccessful, with stock prices now at multi-year lows.
The company’s recent performance may make investors forget that it developed the first commercial microprocessor and was the world’s largest semiconductor company for much of its history. Since its initial public offering (IPO), the stock has generated huge returns for investors and provided important lessons for those who didn’t benefit.
Intel Growth and Lessons Learned
When Intel launched its IPO on October 13, 1971, the company issued stock at a pre-split price of $23.50 per share. Since then, the stock has grown and undergone multiple stock splits, going from that $23.50 share to 1,215 shares worth a split-adjusted $0.02. Doing the math, if you bought one share on IPO day, your investment would be worth $28,990 today, not including dividends.
Unfortunately for long-term shareholders, all of Intel’s profits were generated between 1971 and 2000, and all 13 of Intel’s stock splits took place during this period.
Compared to August 2000’s record closing price of $74.88 per share, the IPO would have valued each share at nearly $91,000. While the dot-com bust, the shift to smartphones, and ultimately the loss of technological leadership weakened Intel in the 21st century, Intel is well positioned in today’s artificial intelligence (AI)-driven technology environment. Many are wondering what it will look like.
Indeed, this history makes the timing of selling Intel very difficult, even for the most seasoned investors. Some stocks recovered from deep declines, while others later faced bankruptcy or dissolution.
Nevertheless, the story of Intel stock speaks to the growth potential that comes with decades of industry leadership. Ultimately, even if Intel isn’t destined for a comeback, investors can learn from Intel’s story and look for companies that will lead the industries of the future.
Should you invest $1,000 in Intel right now?
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Will Healy holds positions at Advanced Micro Devices and Intel. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool recommends Intel and recommends the following options: November 2024 $24 short calls on Intel. The Motley Fool has a disclosure policy.
If you bought one share of Intel stock at the IPO, here’s how many shares you now own. The original article was published by The Motley Fool.
