Intel (INTC) Lost Its Competitive Moat: What Went Wrong? Attiya Zainib Mon, October 12, 2026 at 10:15 AM EDT 3 min read INTC ^GSPC CL=F Trade Intel on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
St. James Investment Company recently released its "Value Investors" third-quarter 2026 investor letter. A copy of the letter can be downloaded here. The fund is operating in an increasingly challenging value-investing environment marked by rising interest rates and energy prices, record government debt, elevated stock-market valuations, and ongoing geopolitical conflicts, even as the S&P 500 remains near all-time highs. The letter does not report a specific third-quarter return for the Select Value portfolio; instead, St. James highlights a market in which U.S. equities have dramatically outperformed bonds since COVID, with stocks beating bonds by an average of 28% annually, while U.S. households now hold 52% of their financial assets in equities. The firm argues that rising oil prices and long-term Treasury yields are increasing the risk of inflation and stagflation, with the 10-year Treasury yield at 5.23% and the 30-year yield at 5.55%, both reflecting substantially higher borrowing costs. Looking ahead, St. James remains cautious about the AI-driven market and believes investors should avoid chasing narratives and instead focus on businesses with durable competitive moats, strong economics, and valuations that provide a sufficient discount to absorb unexpected risks, emphasizing a disciplined, patient value-investing approach. In addition, please check the Fund's top five holdings to know its best picks in 2026.
In its third-quarter 2026 investor letter, St. James Investment Company examined Intel Corporation (NASDAQ:INTC) as a case study in how once-dominant competitive advantages can erode. Intel Corporation designs and manufactures semiconductors, including processors for personal computers and data centers, and historically relied on its manufacturing capabilities and x86 ecosystem to defend its market position. The one-month return of Intel Corporation (NASDAQ:INTC) was 7.73% while its shares traded between $32.89 and $142.35 over the last 52 weeks. On October 9, 2026, Intel Corporation (NASDAQ:INTC) stock closed at approximately $107.08 per share, with a market capitalization of about $553.46 billion.
St. James Investment Company stated the following regarding Intel Corporation (NASDAQ:INTC) in its Q3 2026 investor letter:
"Yet Intel Corporation (NASDAQ:INTC)'s dominant moat slowly eroded: first its manufacturing leadership, then its performance leadership, then its pricing power, and finally its market share. Server market share, ~95% in the late 2010s, fell to 50–70%; client PC share, once overwhelmingly Intel's, became contested. The company that once earned more profit than TSMC, Nvidia, and AMD combined began generating large losses while its competitors pulled ahead (Click Here To Read The Letter In Detail)."
Intel Corporation (NASDAQ:INTC) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. As per our database, 138 hedge fund portfolios held Intel Corporation (NASDAQ:INTC) at the end of the second quarter, which was 112 in the previous quarter. While we acknowledge the risk and potential of Intel Corporation (NASDAQ:INTC) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
In another article, we covered Intel Corporation (NASDAQ:INTC) and shared our views on the company's latest move on next-generation AI chipmaking. In addition, please check out our hedge fund investor letters Q3 2026 page for more investor letters from hedge funds and other leading investors.
This article is originally published at Insider Monkey.
