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Is Intel Showing An Upside Potential ?

July 07, 2014 | About:
anandjha89

anandjha89

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The largest Chipmaker in the computer world, Intel Corporation (INTC), has had a recent change in forecast. The revenue outlook is up from $12.5 billion to $13.5 billion, and is now $13.4 billion to $14 billion. The Santa Clara, California-based company has high hopes for strong profit margins as well. Starting 2013 as a top five stock pick in the minds of many experts and investors, due in large part to its affiliation with Apple, the company showed signs of growth.

The PC's World

The change could stem from the fact that Microsoft Corporation's (MSFT) recently retired its Windows XP operating system. Many PC users are upgrading their PCs, as a result. The adjusted revenue amount has also been credited to the sales of personal computers.

"Intel now expects some revenue growth for the year as compared to the previous outlook of approximately flat," the company said in a statement. "The change in outlook is driven mostly by strong demand for business PCs." Intel's processors are inside more than 70% of the world's PCs. But the previously stable business of providing chips for personal computers has diminished as consumers purchase smartphones and tablets in place of PCs.

Mobile Market

Despite its main interest being in chips, Intel has kept an eye on the mobile market and recently announced a new partnership. Intel has partnered with China's Rockchip with hopes to increase the company's stake in tablet chips. Among other vendors, Intel has previously trailed at fifth place when it comes to units sold.

Wells Fargo's David Wong states,

"We expect Intel's 7260 modem to continue to ramp into a growing customer base for Intel. Intel expects to launch its 4G LTE integrated modem/processor SoFIA product in the first half of 2015. The 3G and 4G SoFIA chips should help Intel begin to penetrate the low and mid- range smartphone market, which its stand-alone modem and processor products do not address."

Intel's president, Renee James sees no problem with Intel handling both mobile and PC products. The two markets may be at odds with each other now, but that may not always be the case.

"In five years' time I don't think we'll be talking about PCs versus tablets, what we're going to see is a blending between them," said Ms James, cited by the Financial Times. "In the end that will look like significant growth, if not a doubling, of what was just known as the PC business."

Spotlight For Intel Investors

With the recent fine from the EU behind it and strong industry catalysts; we are positive on Intel going forward in 2014.

While the market has been tough on many small and/or high-flying tech stocks, Intel is an established industry leader.

INTC beat earnings estimates last quarter, and Deutsche Bank has consistently reiterated its Buy rating. Recently, Canaccord and Topeka Capital Markets joined Deutsche Bank in strong ratings as well.

Intel has a strong, consistent dividend payout - affording dependable income, along with current growth.

Stock Expectations

There is no denying that the news for Intel over the past few weeks has been contradictory. Hopes to increase the company's stake in tablet chips with China's Rockchip company, and their continued relationship with Apple for the Mac Pro. While the market has been tough on many small and/or high-flying tech stocks, INTC beat earnings estimates last quarter, and Deutsche Bank has consistently reiterated its Buy rating. Recently, Canaccord and Topeka Capital Markets joined Deutsche Bank in strong ratings as well.

Intel has a strong, consistent dividend payout - affording dependable income, along with current growth. Intel is an established industry leader, going forward in 2014.


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