I thought it would be limited in information, but Intel provided some strong data and confidence on growth of 15% in servers for over 5 years. We have at least 4 more company events this month, with the last one being on Nov. 29 by the CEO himself. This stock is extremely undervalued with this kind of info at hand. Anyways, if you didn't, check it out. It's at www.intc.com under company events, Nov. 9. Just yesterday. Good stuff.
Wow, that presentation just blew me away. I'm going to go back and listen again and take some notes.
I could see that guy being the next CEO.
I liked how he said the ARM verses Intel was for 3 percent of the server market and that with their expectation of the number of servers doubling in 5 years, the ARM competition would be a rounding consideration.
I'm also just going to send the ARM fanbois there to listen instead of arguing with them.
Intel is going to blow the socks off in 2012 and for years after that.
This is a highly, highly recommended listen...
Yes, they are going balls to the wall on servers.....did you hear the bit about $4000 server chips? Those chips are about 1.2 sq inch in size.
As soon as the server farms are built out, Intel comes up with a new chip that is 25% of the power and perfect cloud based security at chip level with help from McAfee......then everybody throws the old (new) stuff away and starts over because the payback to do so will be six months or less.
For 35 years we always said, "You just can't get ahead of Intel".
Imagine this scenario:
You are a smart phone maker using a Qualcomm Snapdragon processor....and the world is fine. Apple's A5 from Samsung is roughly competitive to the Snapdragon, so there is nothing to worry about.
Now , one day, Apple decides to cut a deal with Intel to build the A5 or A6 or AX. With nothing changed the A5, built on 22nm TriGate, turns out to be higher performance and 25% of the power of the Samsung A5. Battery life goes up by a factor of four.
You, as the Snapdragon user, are suddenly at a serious competitive disadvantage. What do you do? Complain to Qualcomm? Qualcomm can't do anything, they are stuck with TSMC and 40nm planar processes. Does
Qualcomm get on the phone to Intel for foundry work? That doesn't work because Intel considers Qualcomm a competitor.
The only smart phone maker in a position to immediately get the benefits of Intel's 22nm TriGate is Apple because they have their own design that Intel could choose to fab as a "custom chip" (while Apple does a hurry up redesign to plant an Atom core in the next generation AX device). All the other application processor guys are in the same place as Qualcomm, two years behind Apple/Intel because they all use TSMC to fab their parts.
Intel will eventually make standard SoC application processors with the same or better functionality of Snapdragons and the low power of 22nm TriGate (with and Atom core) and will sell them to you. But that won't be until some time in 2013. By that time Apple has a big chunk of your business.
From the webcast, we know that Intel is building the BIGGEST SEMICONDUCTOR FABRICATION FACILITY IN THE WORLD AND UPGRADING ALL THEIR OTHER FACILITIES TO 22nm. That extra capacity is to simply hose the Qualcomms, Nvidias, and the TIs of the world AND in the process cut TSMC business in half.
I don't see any other way for this to play out.
Then, of course, there is the industry wide conversion to flash based solid state drives over the next few years. That will be a $70 billion silicon business. Anyone who thinks that Intel will let that go by is just plain crazy.
As you heard on the webcast, the server business will double in 5 years.....that is a 15% compound growth rate in the server business. SSDs and other things will make the while company double in 5 years or less.
Find any company that earns 25% on sales and grows the top line at 15% per year and see what their price to sales ratio is......you will find numbers like seven times sales. Applied to Intel TODAY those metrics should produce a $68 stock price. Now, imagine the leverage provided by $.30 Jan. 2013 35 calls....could be a 100 bagger or more.