Intel's CEO Bought $9.7 Million of Stock Right After It Plunged 29%. I'm Not Ready to Follow Him In.

Intel (NASDAQ:INTC) CEO Lip-Bu Tan bought 150,000 shares on Nov. 2 through a family trust, paying a weighted average of around $64.73 a share, or about $9.7 million total. The purchase came one trading day after Intel stock plunged 29% on Oct. 30. Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue " The company had just guided for $0.25 of non-GAAP (adjusted) earnings per share in the fourth quarter, down from $0.52 in the third. As I write, the stock trades near $62, a little under what Tan paid. How has Intel stock done after its CEOs bought shares before? Over the past decade, Intel CEOs bought stock on the open market on 24 different days with at least a year of trading since. Twelve months later, shares were higher after 12 of these days and lower after the other 12. The median result was a fall of around 2%, leaving out dividends. Put another way, a CEO buy has shown investors little about where Intel stock would be a year later. And I think the sample is even thinner than 24 sounds. Image source: Intel. Two CEOs, two records All of those purchases came from two people. Brian Krzanich, CEO until mid-2018, didn't make open-market purchases in that period. Bob Swan, who ran Intel as interim CEO from mid-2018 and then as CEO until February 2021, bought on seven days. Shares had risen 12 months later in six of those cases, by between 7% and 22%. But six of his seven purchases were made under trading plans he set up beforehand (plans that let executives buy or sell on a fixed schedule), so they arguably say little about his timing. His only loser, on Jan. 25, 2021, came 12 days after Intel said that Pat Gelsinger would replace him. The stock was 8% lower a year after that buy. Gelsinger's record went the other way. He bought shares on 17 days from October 2021 to November 2024, in every calendar quarter of that stretch. The stock fell over the next 12 months after 11 of those purchases, and two of the six gains were below 1%. Shares he bought on Jan. 29 and Feb. 1, 2024, at roughly $43, were worth about 55% less a year later. But shares he bought on Feb. 23, 2023, climbed 68%. Is 24 purchases enough to go on? Probably not. Several of these purchase days were within a week of each other -- Nov. 29 and Dec. 6 in 2018, for example -- so their 12-month periods covered almost the same stretch of trading. Counting each of those four pairs once, the record shrinks to around 20 separate choices by two people. The results also read more like a record of each CEO's era than of his timing. Swan bought while the stock mostly held between about $42 and $68 a share. Gelsinger, though, kept buying as shares dropped from roughly $49 at his first purchase to below $19 by September 2024. Buying quarterly, he caught both the 2023 rebound and the 2024 collapse. Tan is buying on a far bigger scale Tan's purchase does stand out. At around $9.7 million, it's almost 20 times the size of Gelsinger's largest single-day buy, about $500,000, and over six times Swan's biggest. What's more, the Nov. 4 filing doesn't flag it as part of a prearranged trading plan. It also follows around $10 million of stock Tan bought on Aug. 11 at $95 a share, the same price Intel set for its $23 billion stock offering that month. That purchase is too recent to count yet. The shares worth around $25 million that Tan got directly from Intel in March 2025 under his offer letter aren't in the record either, because he didn't buy them on the open market. Sure, a purchase this big tells me Tan thinks shares are worth more than he paid. It doesn't tell me when the business turns. Revenue in Intel's data center and AI segment grew to $7.3 billion in the third quarter, up 78% from a year ago. But management expects PC weakness to last at least through the first half of 2027, which may leave profits under pressure for several more quarters. And the stock still isn't cheap. Given what analysts expect Intel to earn in 2027, its price-to-earnings ratio is around 35. Over the past decade, how Intel stock did in the year after a CEO purchase came down to the business, not to who was buying. With quarterly profits set to drop by more than half, I'm not ready to follow Tan in at this price. Should you buy stock in Intel right now? Before you buy stock in Intel, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Intel wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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Intel's CEO Bought $9.7 Million of Stock Right After It Plunged 29%. I'm Not Ready to Follow Him In.

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