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Pros Look Elsewhere After Intel Cuts Q1 Outlook

Intel shares plummeted on the company’s lowered profit outlook Monday, leading the “Fast Money” experts to look elsewhere for a better play.

“I don’t think the reasons for its sell-offs are particularly rational in that an inventory issue based on flooding in Thailand says nothing about intrinsic end demand,” said trader Zack Karabell.

Intel’s forecast, which revised fourth-quarter revenue to $13.7 billion from $14.7 billion, cited lower availability of hard drives. The stock traded at $28.34 at 1 p.m, down almost 4.7 percent. false

Karabell said he liked Intel but that wireless companies were a better bet because they operate in an industry that has been expanding even in a troubled economy.

“Which is why you don’t want to own Intel,” said trader Steven Weiss. “You want to own Qualcomm.”

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Trader Steve Grasso of Stuart Frankel said that industry watchers felt as if the lowered outlook should have happened earlier.

“Intel was starting to get in favor with people who didn’t like Intel, and I was one of those guys,” he said.

In October, Intel reported third-quarter results that beat expectations. The computer chip maker issued a bullish forecast, brushing aside concerns that increasing demand for tablets would cut into demand for PCs.

“That 3, 4 points of sequential growth turned out to be 6 or 7 points of sequential decline,” said Craig Berger, senior analyst at FBR Capital Markets.

“I think it’s time to be buying some of these other cyclically depressed chip firms,” he added.

Berger mentioned three other stocks worth a look:

  • ONNN Semi “is super beat-up.”
  • Fairchild Semi
  • Broadcom “A bigger name that’s more cyclically depressed.”

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Trader disclosure: On Dec. 12, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Kelly is long IWM; Kelly is long LNG; Kelly is long EUR; Kelly is long CHF; Cortes is long; Cortes is long Treasuries; Cortes is long INTC; Cortes is long SVU; Cortes is long TSN; Cortes is short; Cortes is short AUD; Cortes is short EUR; Cortes is short GBP; Cortes is short AAPL; Cortes is short DB; Cortes is short Crude; Grasso owns ASTM; Grasso owns AVAV; Grasso owns BA; Grasso owns D; Grasso owns LIT; Grasso owns MHY; Grasso owns PFE; Grasso owns PRST; Grasso owns S; Grasso owns XLU; Weiss owns EUO; Weiss owns JPM; Weiss owns QCOM; Weiss owns HPQ; Weiss owns GM;

For Steve Grasso
Stuart Frankel & Co and its partners own CSCO

Stuart Frankel & Co and its partners own CUBA

Stuart Frankel & Co and its partners own GERN

Stuart Frankel & Co and its partners own HPQ

Stuart Frankel & Co and its partners own HSP

Stuart Frankel & Co and its partners own HSPO

Stuart Frankel & Co and its partners own MET

Stuart Frankel & Co and its partners own MU

Stuart Frankel & Co and its partners own NYX

Stuart Frankel & Co and its partners own PRST

Stuart Frankel & Co and its partners own RDC

Stuart Frankel & Co and its partners own UAL

Stuart Frankel & Co and its partners own XRX

For Simon Baker
Simon Baker OWNS Abbott Labs

For Urs Dur
Lazard Capital Markets LLC makes a market in FDX securities.

Lazard Capital Markets LLC makes a market in UPS securities

For Mark Fields
No disclosures

For Colin Gillis
Investment banking (next 3 months): BGC Financial LP and/or its affiliates, expect to receive, or intend to seek, compensation for investment banking services within the next three months from all of the companies referenced within this report.

Lead or Co-manager: BGC Financial LP and/or its affiliates, has not acted as lead or co-manager in a public offering of equity and/or debt securities for Amazon within the last 12 months. BGC Financial LP and/or its affiliates has not received compensation for investment banking services in the last 12 months from Amazon.

For Dennis Gartman
Gartman is short Euro

Gartman is long equities

For Craig Berger
FBR acts as a market maker or liquidity provider for the company's securities: INTC.

CNBC.com with wires.

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