Some companies tend to be growth plays. Others can be steady. A few are more cyclical, having obvious booms and busts. Tech companies that fall out of favor can become cyclical companies, provided they manage to find new products to invest in to get back on the growth track, even if it’s just for a few years.
Playing this cycle can lead to bigger returns than buying and holding, particularly if buying near the start of a new cycle higher.
Chipmakers tend to be long-term growth plays with deep cuts when the cycle isn’t in boom mode. But companies that adapt can perform well.
Intel (INTC) may finally be back on the boom cycle. The company reported that its next-generation data center semiconductor chips may be ready earlier than expected. That news has given shares a shot in the arm, with March 2023 being their best-performing month since 2001.
Shares are still down by a third over the past year. Revenues are down, as is profitability. But opening up its new line earlier could bring in more revenues and profits sooner.
Action to take: Investors may like shares here as more of a growth play. Intel shares took a dive when it cut its dividend earlier this year, but shares still yield a respectable 1.6 percent.
For traders, the June $35 calls, last going for about $1.17, offer mid-double-digit returns in the span of just a few months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.