Intel’s Dividend Cut: Lose your shareholder base by investing in expensive chip foundries

I explain why I believe Intel (INTC) is making a mistake by doubling down on its investment in "fabs" or foundries. The decision to cut the dividend away from dividend growth investors was mostly driven by the need to invest in manufacturing accross Europe and the USA. While this is great for the West in general, it is not great for shareholders as they are those footing the bill at the end of day. To like the company's dividend cut, you have to believe that Pat Gelsinger will be a better capital allocator than you as a shareholder. This would be a problem for diversified holders of a dividend growth portfolio, who reallocate dividends each quarter based on conviction rather than entirely into Intel. Overall, I believe that investments in Fabs is a bad strategy, and that Intel would have been better off going Fabless (i.e., spinning off their manufacturing) to compete head to head against AMD (and to a lesser extent Nvidia) on the engineering front. Fortunately for western nations, this is not what Intel decided to do and manufacturing is back! Unfortunately for shareholders of Intel, this is going to be very expensive and there is a very high uncertainty regarding future returns.

As always, this video is NOT investment advice, and none of the contents should be construed as such. I do not make short-term or long-term price predictions for any stock investment, and all words spoken in this video are for entertainment purposes ONLY . Also my Avatar was created with, a great tool for creating metaverse-ready 3D avatars.

Related Posts

2 thoughts on “Intel’s Dividend Cut: Lose your shareholder base by investing in expensive chip foundries

  1. I own intel i need to lower the cost i believe they are adjusting with serious growth in the foundries its them and amd and nvidia has a chunk of the gpus. I believe in pat and this company when my nu bank crushes here soon I will buy this as its beaten up to lower my average. I Believe in the intel product end of story. I will wait.

Leave a Reply

Your email address will not be published. Required fields are marked *