Annotated article summary from this weekend's Barron's. Receive all our Barron's summaries by signing up here:
Lesson From a Science Fair: Intel Is Back on the Rise by Eric J. Savitz
Summary: Intel (NASDAQ:INTC) shares are up 27% since April, even as analysts anxiously await news about arch-rival AMD's much-anticipated server chip Barcelona. After attending Intel's Research@Intel day last week, Tech Trader Eric Savitz is convinced that Barcelona, at most, will be a temporary blip in Intel's dominance of the sector. From early 2004 through mid-2006, Intel stumbled colossally, allowing AMD its first lead in the much-coveted microprocessor market. Shares fell 50% over the stretch. Intel responded by streamlining its operations. Marsico Capital analyst David Readerman says Q2 revenue should be $8.8 billion, up from $8b. He also says gross margins will have bottomed, and will start rising in Q3. Intel has already begun the move from 65nm to 45nm chips. AMD has not, and it now looks as though it may be forced to begin outsourcing some of its production, losing a degree of autonomy. New projects include the first teraflop chip, a belt-worn device that rates physical activity, and power-saving projects for data centers. "Intel is thinking big -- and thinking ahead," Savitz says. "Over the next few years, your portfolio really should have Intel inside."
Earnings call transcript: Intel Q1 2007