Intel (NASDAQ: INTC) has had a hard time in recent years Nvidia and old rival Advanced micro devices began to surpass it technically. So far, efforts to catch up have fallen short, causing stock prices to fall in several years.
Its recent performance may make investors forget that it developed the first commercially produced microprocessor and was the world’s largest semiconductor company for most of its history. Since its initial public offering (IPO), the stock has delivered huge returns for its investors and a crucial lesson for those not around to take advantage.
Growth and lessons from Intel
When Intel launched its initial public offering on October 13, 1971, it introduced the stock at a pre-split price of $23.50 per share. Since then, the stock has grown and resulted in multiple stock splits, which would have turned that one $23.50 share into 1,215 shares with a split-adjusted value of $0.02 each. Doing some calculations, if you had bought a single share on IPO day, that investment would be worth $28,990 today, excluding dividends.
Unfortunately for long-term shareholders, all of Intel’s gains occurred between 1971 and 2000, the period in which all thirteen of Intel’s stock splits occurred.
Measured at the record closing price of $74.88 per share in August 2000, the one share from the IPO would have grown to a value of almost $91,000. The dot-com bust, the move to smartphones, and ultimately the loss of its technical edge undermined Intel in the 21st century, and many wonder what form this will take in today’s artificial intelligence (AI)-driven technology landscape.
Admittedly, this history makes the timing of Intel’s sale extremely difficult for even the most seasoned investors. Some stocks have recovered from a bigger decline, while others later faced bankruptcy and dissolution.
Still, the story of Intel stock speaks to the growth potential that comes with leading an industry for decades. Ultimately, even if Intel isn’t destined for a comeback, investors can learn from the story and look for companies that will lead the industries of the future.
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Will Healy has positions in Advanced Micro Devices and Intel. The Motley Fool holds positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool recommends Intel and recommends the following options: Short November 2024 $24 Calls on Intel. The Motley Fool has a disclosure policy.
If you bought one share of Intel stock at the IPO, this is how many shares you would own now. originally published by The Motley Fool
