Intel (NASDAQ: INTC) has struggled in recent years as Nvidia and longtime rival Advanced Micro Devices began to surpass it technically. So far, efforts to catch up have fallen short, taking its stock to multiyear lows.
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 offered massive returns for its investors and a critical lesson for those not around to benefit.
Growth and lessons from Intel
When Intel launched its IPO on Oct. 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 that would have turned that single $23.50 share into 1,215 shares valued at a split-adjusted $0.02 each. Doing some calculations, if you had bought a single share on the IPO day, that investment would be worth $28,990 today, not including dividends.
Unfortunately for its longest-term shareholders, all of Intel's gains occurred between 1971 and 2000, the period when all 13 of Intel's stock splits occurred.
If measured against 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 toward smartphones, and ultimately, the loss of its technical lead undermined Intel in the 21st century, and many wonder what form it will take in today's artificial intelligence (AI)-driven tech landscape.
Admittedly, this history makes the timing of selling Intel extremely difficult for even the most seasoned investors. Some stocks have recovered from more significant declines, while others later faced bankruptcy and dissolution.
Nonetheless, the story of Intel stock speaks to the growth potential that comes with spearheading and leading an industry for decades. Ultimately, even if Intel is not destined for a comeback, investors can learn from its story and seek companies leading the industries of the future.
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Will Healy has positions in Advanced Micro Devices and Intel. The Motley Fool has 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 1 Share of Intel Stock at Its IPO, Here's How Many Shares You Would Own Now was originally published by The Motley Fool