Peter Schiff Warns Against Irrational Exuberance Toward Tech Stocks, Cryptos As Economist Cites Intel's Fall From Grace

Intel Corp. INTC, which was once feted as the semiconductor industry titan, has fallen out of favor with customers and investors, with much of the weakness self-inflicted and the stock has amply discounted the predicament. Prominent economist Peter Schiff on Friday used the company as an example to warn investors how a financial asset can fall from grace over a period of time.

What Happened: Intel stock settled Friday’s session down 2.63% at $18.89, marking the lowest closing level since Aug. 2009 when stocks plummeted following the Great Financial Crisis. “This is an example of how once universally loved stocks can fall out of favor,” Schiff said.

He also said, “Investors in favored tech stocks or #cryptocurrencies should keep this in mind.”

Source: Benzinga Pro

See Also: Best Semiconductor Stocks

Why It’s Important: Intel stock has underperformed its semiconductor peers, and a comparison vis-a-vis Nvidia Corp. NVDA shows the stark contrast. Nvidia has been quick to identify the evolving opportunity in the dynamic tech sector and has moved away from being a mere manufacturer of gaming chips to being at the center of the artificial intelligence revolution that is taking hold.

Intel for one started off as a dominant player in the semiconductor industry and a series of product missteps and a lack of visionary approach unlike that of Nvidia’s Jensen Huang have pushed it to the corner.

The stock fell a whopping 26% on Aug. 2 after the company reported a double miss, and more importantly, it reported a year-over-year revenue decline. CEO Pat Gelsinger has made no bones about the precarious condition the company is in. The company suspended its dividend as a resuscitation measure,

Reports suggest the company is reportedly considering selling unnecessary businesses and revamping capital spending. A Reuters report said last week that Gelsinger will propose to the board later this month cost-cutting measures, including selling its programmable chip unit Altera.

In premarket trading, Intel rose 0.69% to $19.02, according to Benzinga Pro data.

Read Next:

• Economist Peter Schiff Warns Of Unhealthy Combo Of Recession With Rising Inflation After Trifecta Of Underwhelming Data

Image Via Shutterstock