|Bid||45.25 x 900|
|Ask||46.36 x 1300|
|Day's Range||45.54 - 46.33|
|52 Week Range||39.83 - 57.60|
|Beta (3Y Monthly)||1.08|
|PE Ratio (TTM)||16.55|
|Earnings Date||Oct 25, 2018|
|Forward Dividend & Yield||1.20 (2.67%)|
|1y Target Est||55.26|
Yesterday’s rally is firmly in the rear view mirror as stocks faded after a choppy session following the release of the Fed minutes. It’s not like the Fed revealed anything surprising in the blow by blow recap of the September meeting when it raised the target federal funds rate range by a quarter percentage point and promised two or three more hikes by year-end. Former Wall Street darlings like IBM, GE and Intel have had a hard time resonating with investors who have been favoring growth stocks like the FAANGs, and 2018 has been a year they would like to forget.
Chip giant Intel is restructuring its technology and manufacturing business group as it chases more connected device markets and grapples with delays on its next chip generation. In a memo to employees, reviewed by the Business Journal, Group President and Chief Engineering Officer Murthy Renduchintala described splitting the technology and manufacturing business into three groups. The three new groups are technology development, manufacturing and operations and global supply chain.
Semiconductor analysts at Morgan Stanley, Deutsche Bank, SunTrust Bank and other investment houses have been sounding the alarm for weeks now. Intel Corporation ( INTC) shares spent years struggling in the $20s and $30s, finally breaking out in the fourth quarter of 2017 and entering an uptrend that posted a 17-year high in the upper $50s in June. It has been all downhill since that time, with the industry leader retreating nearly 25% while breaking support at the 200-day exponential moving average (EMA).
(Bloomberg Opinion) -- When you're trying to work out what's going to happen next year in the semiconductor industry, there are worse places to look than ASML Holdings NV.
In the previous part of this series, we saw that Intel’s (INTC) delay in the launch of the 10 nm (nanometer) node could put it behind rival Advanced Micro Devices (AMD) and Taiwan Semiconductor Manufacturing Co. (or TSMC) (TSM) in terms of technology. For years, Intel has been the leader in the manufacturing technology node. It was this technological advantage that helped Intel gain market share and command a high price for its products.
The first half was strong for Intel’s (INTC) DCG (Data Center Group). Demand outlook seems strong in the second half. Gartner estimates the worldwide public cloud computing market to grow 21.4% YoY (year-over-year) to $186.4 billion in 2018. The growth in cloud computing would drive demand for Intel’s high-performance Xeon Scalable server CPUs (central processing units).
In the previous part of this series, we saw that Intel (INTC) launched it ninth-generation Core processors even though it’s facing yield issues on its 10 nm (nanometer) node. Intel has already delayed the launch of its 10 nm products from the 2016 holiday season to the 2019 holiday season, allowing rivals Taiwan Semiconductor Manufacturing (or TSMC) (TSM) and Samsung (SSNLF) to go ahead of it in terms of manufacturing technology. With the 7 nm node, AMD has tweaked its strategy and is bringing server CPUs first, which could be followed by client CPUs. On the other hand, Intel could launch its client CPUs first and then server CPUs, although the gap between the two launches would be short due to delays in the 10 nm node.
Intel (INTC) has been transitioning to the data-centric business, and DCG (Data Center Group) is its most profitable business segment, growing double-digit YoY (year-over-year). Intel’s DCG is seeing strong demand from the Cloud and Communications Service Providers as they prepare for AI and 5G. It’s also seeing growth in the Enterprise segment as companies increasingly adopt analytics, which is increasing their data-intensive workloads.
In the first part of this series, we saw that Intel (INTC) has been transforming its business from a PC-centric company to a data-centric company. In order to make money from the declining PC market, it has refined its PC strategy to focus on three high-end PC segments: mobile, gaming, and commercial. All three segments have diverse power and performance requirements, so Intel designed a PC portfolio that caters to these segments.
Although Intel (INTC) has been shifting to its data-centric business, PC is its biggest segment. PC contributes over 50.0% toward revenues and over 60.0% toward operating income. The CCG (Client Computing Group) offers PC CPUs (central processing units) and smartphone modems and competes with Advanced Micro Devices’ (AMD) Ryzen CPUs and Qualcomm’s (QCOM) modems.
We speak with serial entrepreneur Faraj Aalaei, CEO of San Jose-based fabless semiconductor Aquantia, about his advice for taking a company public, the automotive opportunities for chipmakers, and how he thinks about dealmaking.
Stocks scored big gains Tuesday as the major market indexes gapped up at the open and plowed higher throughout the session.
Intel (INTC) was surrounded by technical, competitive, and macro headwinds in the first nine months of 2018. Those headwinds started to clear one by one in October.
It’s important not to overreact to the recent declines in Nvidia (NASDAQ:NVDA) stock. Long-term, I still believe Nvidia stock is a buy. Short-term, it has been a different story. Nvidia stock has fallen 18% in just the last eight trading sessions before today.
Intel (INTC), the PC and server CPU (central processing unit) leader, started 2018 with the disclosure of chip design flaws Spectre and Meltdown. While Intel was working out a solution for these flaws, it announced a delay in the launch of its 10 nm (nanometer) products to the 2019 holiday season. Intel announced the abrupt resignation of its CEO Brian Krzanich and acknowledged that it would face a shortage of CPUs in the second half of 2018.
Intel (INTC) completed 50 years in the business in 2018. Five years ago, with changing trends, the company started a multiyear transformation from a PC-centric company to a data-centric company. The transformation increased Intel’s data-centric revenue contribution from 33% to 50%.
Last week, just days after flirting with the 27,000 threshold and setting new record highs, the Dow Jones Industrial Average plunged on worries over the impact rising long-term interest rates would have on the economy amid the Federal Reserve’s ongoing tightening cycle. This week, after the harrowing selloff, U.S. equities found respite thanks to these Dow Jones stocks. Adding to the worries has been a persistent bid in crude oil prices and the rollout of third-quarter corporate earnings results.
Intel (INTC) is seeing strong growth from its data-centric business, which is driving its revenues and profits in dollar terms. Its operating cash flow rose 18.0% sequentially and 57.5% YoY (year-over-year) to $7.4 billion in the second quarter. Intel’s second half is stronger than its first half in terms of revenues and cash flows as seasonal demand increases.
Intel’s (INTC) gross margin is influenced by unit volumes, ASP (average selling price), and the resultant product mix. Gross margin is also dependent on production cost. According to Moore’s law, every node shrink would improve performance and reduce cost.
Intel (INTC) has been adding a variety of products and leveraging its existing products in various applications. This is driving the company’s revenue growth rate while controlling expenses. However, the company is taking a hit on its gross margin, as some products have lower margins. Intel’s gross margin is a product of ASP (average selling price), sales volume, product mix, and production cost.