Intel (INTC), the famous chip maker whose major competitors include Advanced Micro Devices (AMD), Qualcomm (QCOM) and Texas Instruments (TXN), started the new year off on a great foot. According to Eric Buscemi's roundup Monday, the company received an upgrade from Baird which gave it a price target of $26. Intel closed on Monday at $20.88.This should end up being a good call. When I covered Intel's third quarter earnings back in October, I noted the improvement in the fundamentals. I also mentioned the nice price action at the time, and suggested investors consider selling into the strength. The stock did retreat after that, but for those holding for the long term, it didn't much matter. The shares eventually rebounded and are currently not too far from their 52-week high that was made in reaction to the quarterly report.

Intel's shares have given investors a lot of happiness over the last year. Buying the dips proved to be the smart thing to do.

It isn't always easy to enter the pullbacks, considering the economic turmoil we've been through. I'm certainly not going to claim that we're fully recovered, but Intel is a tech icon that is going to continue to rebound as we get further away from that nasty recession (of course, we could use some more jobs, please).

When it comes to valuation, Intel obviously isn't as cheap today as it was many months ago. Although it might command a premium compared to some of its competitors, let's be real here: Intel's power in the marketplace surely deserves some kind of premium.

I see investing in Intel as a good idea for 2010. Maybe I'll be wrong, but I think $26 is easily achievable. Intel's true potential is probably even higher than that. It won't be a straight shot to the top (what usually is?), but when it comes to bets in the equities market, I'd say this one has a reasonable amount of logic attached to it.

Disclosure: I don't own any company mentioned; positions can change without notice.


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