Intel, The Chips Aren't Down
Stocks: (INTC)(AMD)(MRVL)
Intel may finally have a chance to break out if it funk
With the sale of its mobile phone chip unit to Marvel and the introduction of a news line of products to challenge Advanced Micro Devices, the stock has the opportunity to rebound from a number of weeks when it has reached 12 month lows. The stock now trades near its bottom at $18.58, well down from the 52-week high of almost $29.
The $600 million that Marvel paid Intel is not terribly important given the chip giant's balance sheet. The reason for selling, which is to concentrate on its core chip business may be.
Intel's new Xeon dual-processor, aimed at the server market where AMD has done well, may get it back some of the market share it has lost to its smaller rival. The company has two other chips for desktops and laptops coming out late this summer.
Intel has been able to make the case that its new Xeon dual-processor is competitive with AMD's chips and moves the company to a more efficient architecture. Heat and power consumption have become as important as processing power, and Intel has taken the shift to heart. According to the Financial Times: "Intel said more than 200 models of servers and workstations from more than 150 manufacturers were planned for the Woodcrest chip. It would deliver a 135 per cent performance improvement and up to a 40 per cent reduction in energy consumption over previous Intel server products".
Intel has been viewed recently as a company with products that are behind the times, and the financial results of the company are not as stellar as in past years.
For the quarter ending April 1, revenue was $8.94 billion and operating income was $1.718 billion. But, in the immediately previous quarter ending in December, revenue was $10.2 billion and operating income hit $3.3 billion.
Wall St. has begun to take notice of a possible improvement in Intel's fundamentals. Recently, UBS upped its rating on the company from "neutral" to "buy" on the premise that margins will improve at the company.
Intel's stock may have reached a bottom. If solid results follow its new product announcements and the pledge to focus on its core business, driving the sale to Marvel, the company has the chance to move back above the $20 mark.
Douglas A. McIntyre can be reached at douglasamcintyre@gmail.com. He does now own securities in companies he writes about.
Intel may finally have a chance to break out if it funk
With the sale of its mobile phone chip unit to Marvel and the introduction of a news line of products to challenge Advanced Micro Devices, the stock has the opportunity to rebound from a number of weeks when it has reached 12 month lows. The stock now trades near its bottom at $18.58, well down from the 52-week high of almost $29.
The $600 million that Marvel paid Intel is not terribly important given the chip giant's balance sheet. The reason for selling, which is to concentrate on its core chip business may be.
Intel's new Xeon dual-processor, aimed at the server market where AMD has done well, may get it back some of the market share it has lost to its smaller rival. The company has two other chips for desktops and laptops coming out late this summer.
Intel has been able to make the case that its new Xeon dual-processor is competitive with AMD's chips and moves the company to a more efficient architecture. Heat and power consumption have become as important as processing power, and Intel has taken the shift to heart. According to the Financial Times: "Intel said more than 200 models of servers and workstations from more than 150 manufacturers were planned for the Woodcrest chip. It would deliver a 135 per cent performance improvement and up to a 40 per cent reduction in energy consumption over previous Intel server products".
Intel has been viewed recently as a company with products that are behind the times, and the financial results of the company are not as stellar as in past years.
For the quarter ending April 1, revenue was $8.94 billion and operating income was $1.718 billion. But, in the immediately previous quarter ending in December, revenue was $10.2 billion and operating income hit $3.3 billion.
Wall St. has begun to take notice of a possible improvement in Intel's fundamentals. Recently, UBS upped its rating on the company from "neutral" to "buy" on the premise that margins will improve at the company.
Intel's stock may have reached a bottom. If solid results follow its new product announcements and the pledge to focus on its core business, driving the sale to Marvel, the company has the chance to move back above the $20 mark.
Douglas A. McIntyre can be reached at douglasamcintyre@gmail.com. He does now own securities in companies he writes about.
posted by douglas mcintyre at 10:22 AM
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