Intel Corporation (NASDAQ:INTC) has been through some tough times. In just the past year alone, this key component of the DOW experienced an incredible slide of over 17% due to the fact that the PC computer is no longer the hottest item on the market. But that could all be poised to change as this semiconductor stock begins a red hot rise with some new technology set to release in 2014. Just how hot may it get? Read on to find out.
Stock Profile Summary
Recent weeks saw this largest semiconductor company in the world experiencing a struggle uncommon to its global status. The end of August saw Intel up 1%. Despite its recent struggles, there is faith among bullish investors that the company will be well-poised to maintain its position due to its significant investment into research and development. As well, the fact that the company currently owns approximately 80% of the microprocessor market, as well as having an impressive budget for capital expenditures is another reason for investor confidence.
Intel was also recently listed as a stock that was poised to boost dividends by at least one expert investment source. This is due to the fact that the company's almost total ownership of the microprocessor market gives it a wide moat. Also affecting its positive yield potential is the fact that the market for computer chips has been seen as unfavorable by investors, only increasing Intel's dividend yield.
The sheer volume of cash that the company is able to generate allows it the freedom to inject its research and development department with far more cash than any other company in its sphere. In a perfect world, cash generation would be all that was needed for a company to remain unchallenged in its market. Unfortunately, this is not the case. Mobile devices could mean challenges for Intel in the future, simply because the company doesn't own the lion's share of the chips that power them.
But financially speaking, Intel's $13 billion net cash and investment position is only expected to widen, which gives it a solid investment position.
A Highest Options Volume Attractor
Although Intel has lagged behind in the broad market over the last few months, as well as notably underperformed the S&P 500 by over eight percentage points in the past 60 sessions, trading was higher than normal as of August 23rd. However, the near term may see a continuance in downward trajectory by at least one speculator. This is due to the fact that there was a simultaneous trading of two symmetrical blocks of 10,000 contracts, one which crossed bid price at $0.17 in the October 20 put, and another, crossing at October 22's put at $0.63. Each strike's rise resulted in implied volatility, which apparently initiated a long put spread to for a net debit at $0.46.
Trading last week saw Intel's Market Capitalization at $111.8 billion, with an average trading volume of 23,088,692.
Reasons Why Intel Could Soon Close the Gap
Although Intel stock was recently reduced to a Neutral rating during the week of August 19, by Baird analysts, due to seasonal demand that was weaker than expected, there is good news to the tune of new and innovative products coming out of the company.
The XMM 7160
One of these is a new LTE chip set, which may very well blast Intel past its long-time competitor Qualcomm. The 4G LTE chip is a multimode XMM 7160 chipset, and will be hitting the market by the end of August 2013. Why is this new LTE chipset such a big deal? Because its multimode design will enable device users to toggle LTE bands as they are required, as well as allowing them to switch between 3G, 2G or 4G when needed. Not only will Intel's new LTE chip be smaller than its Qualcomm competition by 12 percent, but the XMM 1760 may consume up to 30 percent less power than do their Qualcomm counterparts.
The XMM 7260
Still in development, Intel's XMM 7260 will ship in next year's first half. The XMM 7260, demonstrated by an evaluation board at the company's launch event, will support LTE-advanced features including carrier aggregation. The production of the XMM 7260 will occur in Intel's own fabrications department, a move to not only reduce production cost, but also increase the company's production control.
The Intel Tablet
2014's third quarter will see the launch of Intel's Cherry Trail, which will feature the company's 14nm Airmont architecture, with a processor speed of 2.7 GHz. The Willow Trail is a second tablet platform, also scheduled for release in 3rd quarter 2014. The Willow Trail will contain Goldmont architecture, able to support Android and Windows phones, thanks to its GEN 9 GPU.
At least one investment contributor sees a PC refresh cycle in Intel's future. The new chipset introductions could very well result in Intel increasing its revenues by as much as 5%, making it a worthwhile investment. And while investors are waiting, they may very well see some return from Intel's 4% dividend yield.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.