If stock charts were alive, Intel’s would likely require counseling. Once the pride and the darling of chip geeks, Intel has lately seemed more like the tech industry’s forgotten uncle at a wedding, who is still present and still chatty, but no longer the life of the party. Long-term investing is generally publicized as the savvy investor’s road to fortune, which is a gradual and patient build-up towards compounded returns. However, even the most disciplined investors are occasionally forced to face unpleasant realities. For instance, Intel shareholders have suffered a ruthlessly brutal 64% total shareholder loss in the last five years. More recently, Intel’s shares have fallen 5.7% in the last week alone, down 15% in the last quarter, and have declined 35% over the last year. The previously invincible tech giant appears to be in a long-term depression.

As Warren Buffett recently said,

“Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace.”

Currently, Intel seems like a ship headed against a powerful economic tide, with few sails still unfolded.

Market Sentiment & Earnings

Intel’s earnings-per-share (EPS) are below zero, so it is tough to make a clear distinction between its profitability and its falling stock price. When a company goes into the red, it is rarely shocking to find investor faith wear down. In fact, such a fall in earnings, especially for a company that was once the epitome of innovation, is more than a red signal; it’s more like a storm signal.

Although the price decline may appear dramatic, the market’s response seems appropriate given Intel’s diminished performance. However, there is one slight indicator of optimism, which is insider buying. Directors and executives have bought stock within the past year, which potentially reflects inside optimism regarding a long-term recovery.

Dividend Support & Calculating Total Shareholder Return (TSR)

It’s vital to separate share price fall from Total Shareholder Return (TSR). Although Intel’s share price is down 68% in five years, its TSR, taking account of dividend payments and reinvestment, is a little better at 64% down. That 4% difference won’t go very far, but it’s an indication that dividends can give some kind of partial protection when things get rough. For long-term investors, that dividend has been one of the few bright spots in an otherwise gloomy sky.

Road to Redemption?

The rest of the market has grown around 11% in the last year, a dramatic contrast to Intel’s 35% drop. The figures are ugly, but contrarian buyers understand that times like these are when turnarounds start, or implode remarkably. Intel still enjoys enormous brand recognition, and its recent efforts to get back into the game through future-generation semiconductor plays could prove fruitful, but it’s no certainty.

Until there is some improvement in core metrics, such as earnings growth, product competitiveness, and foundry credibility, optimism is speculative. Nevertheless, there are some investors who are keeping a close eye, especially those who monitor insider trading activity and value plays. Intel can be a fallen giant, but sometimes fallen giants stage the loudest comebacks.

The Next Five Years

Long-term investment doesn’t equate to the avoidance of losses, it equates to the patience to evaluate value while others are consumed by price declines. For Intel, price is lower, sentiment is weak, and fundamentals require a boost. With internal conviction on the rise and strategic realignments in progress, the next five years could have an entirely different narrative than the previous five.

The market hardly pays off on patience loudly, and in the case of Intel, it has penalized it for decades. However, there comes a time when the tables turn, technology progresses, and old players occasionally surprise. Sure, the numbers are cruel, and sure, Intel’s innovation machine has coughed more than it has galloped, but it does not mean the race is finished.

The firm’s huge R&D expenditures, insider optimism in the form of recent stock buying, and efforts to dig its way back into the AI and high-end foundry markets imply that it is not sitting on its hands. For contrarian investors with steel nerves and a long horizon, Intel might yet give what it once pledged, not a growth of an explosive level but steady and credible rehabilitation. After all, markets tend to be looking ahead, and what happens next at Intel might matter more than all that it failed to do previously.