Technology company Intel (NASDAQ: INTC) is no longer the shining star it was in the early days of the personal computer industry, and it has had a lot of research and development problems since then.
And yet the stock continues to post market-beating (if volatile) gains: its share price is up more than 830% since July 1994. A $5,000 investment in Intel back then would be worth just over $46,600 today, and that doesn’t even take into account the modest dividends it has paid out over that time.
But these numbers come with an important caveat: Long-term investors who bought into Intel shares when they were at their most attractive haven’t actually seen any gains.
Intel’s stock price has been (very) hot and cold.
Intel’s stock price may have risen 830% over the past 30 years, but all of that profitability was generated before the dot-com bubble of the late 1990s. As of now, the stock is trading at the same level as it was in July 1999, retreating from the gains it made between then and the crash of the late 2000s.
But that’s not to say Intel hasn’t offered plenty of opportunities for long-term investors in the meantime: The company’s stock price languished all the way through the end of the subprime mortgage collapse in 2008, but then rose more than 460% from its lows in March 2009 to its highs in early 2020, only to fall again by nearly half in that time.
These ups and downs simply reflect Intel’s volatile performance and investors’ constantly shifting perceptions of the company’s growth prospects.
Each strain has its own unique personality
There is a lesson to be learned here: all investors should think long term, but also recognize that not all “blue chip” stocks are necessarily attractive buy-and-hold stocks. Some stocks, due to the nature of the company’s business, may prove to be more productive as cyclical investments than as lifetime holds.
But no one can forget this truth: Identifying major turning points in stocks is difficult, if not impossible. Buying and holding stocks that are less susceptible to cyclicals and volatility is also a viable option.
Should I invest $1,000 in Intel right now?
Before you buy Intel stock, consider the following:
The analyst team at Motley Fool Stock Advisor just identified the 10 best stocks for investors to buy right now, and Intel isn’t on the list — all of which have the potential to generate huge gains over the next few years.
Consider the date when Nvidia made this list: April 15, 2005… If you had invested $1,000 at the time of recommendation, you would have made $787,026!*
Stock Advisor gives investors an easy-to-follow blueprint for success, with portfolio construction guidance, regular updates from analysts, and two new stock picks every month. The Stock Advisor service has more than quadrupled S&P 500 returns since 2002*.
The story continues
View 10 stocks »
*Stock Advisor returns as of July 15, 2024
James Brumley has no position in any of the stocks mentioned. The Motley Fool recommends Intel and recommends buying Intel’s January 2025 $45 calls and selling Intel’s August 2024 $35 calls. The Motley Fool has a disclosure policy.
If You Invested $5,000 In Intel Stock 30 Years Ago, Here’s How Much You’d Have Today was originally published by The Motley Fool.