Intel‘s (NASDAQ: INTC) stock has faced a tumultuous ride this month, with a sharp 34% decline since July 30, signaling looming concerns over a potential recession. As market volatility rattles investors, the once-mighty Intel has stumbled, missing revenue and earnings-per-share expectations in the second quarter of 2024.
While weathering a market downturn is often preferred to hastily abandoning a tech stock such as Intel, this may not be the opportune moment to consider increasing your stake.
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Despite recent setbacks, Intel’s forward price-to-earnings (P/E) ratio towers above that of its tech counterparts, placing it at a significant valuation disadvantage when compared to tech giants like Advanced Micro Devices (NASDAQ: AMD) and Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG).
Choosing to overlook Intel’s ailing stock, investors are encouraged to explore the potential of these two millionaire-maker stocks instead.
Shifting Focus to Advanced Micro Devices
Advanced Micro Devices (AMD) has endured a 24% decline in stock value amidst the recent tech sector turmoil. Despite this, the company’s upward trajectory over time has generated substantial wealth for many investors, with its shares surging over 3,000% since 2014.
AMD has carved out a vital niche in the competitive chip market, powering an array of tech products ranging from gaming consoles like Sony‘s PlayStation 5 to personal computers and data centers. This diversified exposure positions AMD favorably in the tech landscape.
In Q2 2024, AMD defied expectations with a 9% year-over-year revenue increase, surpassing estimates by $120 million. The company’s strategic focus on AI-driven data center solutions led to a remarkable 115% revenue jump in this segment and a 49% surge in client sales.
While challenges in the gaming segment persisted, AMD’s robust performance in AI investments underscored its promising growth trajectory, outshining rivals in the AI chip industry.
The Ascendancy of Alphabet
Alphabet’s stock has weathered a 17% decline since early July amid broader tech turbulence, offering investors an opportunity to capitalize on its attractive forward price-to-earnings (P/E) ratio of 21. Recent earnings underscore Alphabet’s resilience and growth potential.
Alphabet’s Q2 2024 earnings showcased a strong 14% year-over-year revenue increase to $85 billion, fueled by robust advertising gains and a remarkable 28% revenue surge in Google Cloud, outpacing industry giants like Amazon Web Services and Microsoft.
Amidst a shift towards cloud computing, Alphabet’s Google Cloud segment achieved an unprecedented operating income milestone, nearing $1 billion for the first time. This success not only diversifies Alphabet’s revenue streams but also positions them strongly in the realm of AI development.
With a shining history of enriching investors and a stock that has grown by 470% in the last decade, Alphabet’s current valuation presents a compelling case for investment, overshadowing the appeal of Intel in the tech investment landscape.
Wrapping Up the Investment Talk
When considering investing in Advanced Micro Devices, remember that the Motley Fool Stock Advisor analysts have identified 10 top stocks for potential high returns, where Advanced Micro Devices surprisingly did not make the list. The historical success stories of companies like Nvidia, which emerged as a potential millionaire-maker in the past, serve as a testament to the potential market dynamics.
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As the market ebbs and flows, the allure of moving away from Intel toward visionary stocks such as Advanced Micro Devices and Alphabet grows stronger, positioning investors for a promising journey in the ever-evolving tech domain.