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I joined Seeking Alpha as a Senior Editor in September 2012. I work closely with company leaders on content and publishing initiatives, primarily the SA Pro and SA Buyside platforms. A little about me: - I'm a native Texan. - I'm a value investor; I always enjoy reading well-constructed and... More
  • Intel: Inside Track On The Next Decade 19 comments
    Nov 20, 2012 11:30 AM | about stocks: INTC

    Anyone who has ever bought a computer is familiar with the little Intel Inside sticker that comes with it. Intel Inside (and the accompanying 5-note jingle) is one of those instantly recognizable corporate logos along the lines of McDonald's "I'm Lovin' It" and UPS's "What Can Brown Do For You?"

    However, despite the tremendous brand equity that Intel (NASDAQ:INTC) has built up with the enterprise and consumer alike, the stock hasn't been receiving much respect lately. After peaking in May just above $29, Intel is now struggling to hang above $20 - in just half a year, the company has shed nearly a third of its market cap. In fact, Intel has declined almost 25% since I started purchasing in the $26 range.

    That might be a signal for most investors to start crying, but rather than be sad, I'm thrilled. Why? Well, more on that later. And no, I'm not short. INTC is my largest long position. It's my belief that Intel is substantially undervalued and could be a winning investment over the next decade. This article will hopefully serve as a starting point, or springboard, if you will, for analyzing why Intel is primed to succeed.

    Intel Inside: The Next Decade

    Intel's precipitous decline has mostly been predicated on doom-and-gloom about the future of the computing industry. Report after report proclaimed that tablets were king and PCs were dead. Investors in PC-related names including Intel, Dell (NASDAQ:DELL), Microsoft (NASDAQ:MSFT), Hewlett-Packard (NYSE:HPQ), Nvidia (NASDAQ:NVDA), and Marvell (NASDAQ:MRVL) were beaten down so hard that even Chris Brown must feel sorry for them.

    Numerous charges have been leveled against Intel, all of which are patently false and based either on a lack of understanding or sheer misinformation. It's stunning that a >$100B market cap company with one of the most powerful brands under the world is flying under the radar as one of the safest stocks to hold for the next decade. Through the course of this (very long) article, I'll analyze the various aspects of Intel's business in a myth-truth-details format, going from broad industry trends to Intel-specific factors, then conclude with a valuation and investment outlook section.

    We'll start out with the biggest lie of them all.

    Myth: The PC is dying.

    Truth: The PC isn't dying.

    The argument generally goes something like this. NBC News runs a piece titled 'Tablets to become primary computers for many' with a first paragraph reading:

    Tablets will become the "preferred, primary device for millions of people around the world" by 2016, as not only consumers, but businesses gravitate toward convenience over computing power, according to a new report from Forrester Research.

    Interpretation by the world at large: ZOMG THE PC IS DYING!11!1! TABLETZ ROOL!!!

    Sadly, due to the populace's collective attention deficit and the presence of much more interesting headlines about Honey Boo Boo's latest antics, the next paragraph generally gets ignored.

    "There will still be lots of personal computers sold and in use - in fact our casual estimate is that there will be 2 billion PCs in use by 2016, despite growing tablet sales," said Frank Gillett, a Forrester analyst who focuses on predicting future scenarios, on his company's blog.

    Fun story: according to eTForecasts, there were 1.6B computers in use worldwide as of 2011. Doing some very basic math in my head, two billion is more than one point six billion. The truth is, tablets are media consumption devices that, as of now, are far inferior to a computer for productivity purposes. For the same price ($699) as a WiFi-only version of the latest iPad iteration, you can get a touch-enabled Ultrabook, or an even better desktop. Western consumers with credit cards and only a vague understanding of the term "fiscal responsibility" are happy to line up around the block for each marginally improved iThing, but the emerging market consumers powering industry growth are likely to make more cost-conscious choices. (FWIW, the majority of Intel's revenues come from Asia-Pacific.) They want the most bang for their buck. When asked to choose between a device that can play Angry Birds and a device that can help them run their business, the majority will choose the latter option.

    So, sure, you can look at the latest quarter, with an 8% decline in PC shipments, and you can ignore the fact that the Osborne effect plus a bad economy has never added up to be fun for PCs. But the same models that project long-term growth in tablets project slow (but still existent) growth in PCs.

    The general investment community consensus is that the "dying PC" trend is bad for PC-processor-making Intel, but as I've just demonstrated, the PC isn't dying. Not even close. And that's not even considering the next whopper.

    Myth: Tablets Will Replace The PC

    Truth: PCs Will Replace Tablets

    I alluded above to the fact that tablets, in their current form factor, have very limited productivity ability. You can view movies, play games, check email, read books - which are all great for relaxation - but not so hot for getting actual work done, with the potential exception of email-checking. However, that can be done on a smartphone, leaving tablets in the no-man's-land overlap between "can't fit in your pocket" and "can't crunch numbers." (I once attempted to perform some editorial work on my phone. Saying "it didn't work" is putting it politely.)

    So tablets, in their current form factor, aren't very useful. This, of course, hasn't prevented the general public from being obsessed with them. It's understandable - they're the new hot toy. But before long, there's another new hot toy, and tablets will become a boring old toy. One Christmas, portable DVD players were the in thing. Then along came notebooks with DVD drives, and we all know what happened next.

    Portable DVD players fulfilled a consumer want/need: the ability to watch movies on the go. However, they were a one-trick-pony - that's all they did. Soon, they were replaced by multifunctional devices that fulfilled that need and more.

    Tablets are kind of in the same boat right now. They're great for putting on your lap while you're watching TV (because, you know, we really physically need two sources of entertainment simultaneously), but other than that, they're less useful than a salad spinner.

    The obvious solution is to merge laptops and tablets. Obvious, that is, to everyone except Tim Cook:

    "You can converge a toaster and a refrigerator, but those aren't going to be pleasing to the user."

    With all apologies to Mr. Cook, who I actually think is pretty cool in general, a laptop/tablet hybrid (aka, the Ultrabook) is more along the lines of converging a refrigerator and a freezer - which I'd say has worked out pretty well for consumers. The laptop/tablet hybrid seems like it will also work out pretty well - Windows 8 convertibles like the Dell XPS 12 and the Lenovo IdeaPad Yoga have been widely praised by reviewers. With laptop battery life quickly approaching that of tablets (refer to the power consumption section later) and help from Windows 8 (my two-year-old laptop boots in 10 seconds and shuts down in three), any instant-on/battery life advantages that tablets currently have will quickly erode. As Ultrabook prices continue to decline, high-end tablets' price advantage over high-end Ultrabooks will erode as well - realize that once you add a keyboard case and other accessories to an iPad, you're coming close to four figures.

    Besides, enterprise customers like the idea of Ultrabooks a whole lot better than they like the idea of pure tablets:

    click to enlarge)

    So essentially, not only will PCs not die, but tablets will become PC-ified as well. All of this bodes well for Intel, the world leader in PC chips.

    Myth: Intel Can't Compete In Mobile, x86 Is Outdated and Can't Beat ARM/RISC

    Truth: RISC Isn't Special Sauce, Intel Kicking Serious Butt

    This section could also be titled "power consumption," which is cetainly important in the mobile era.

    Somewhere along the line, a myth got propagated that RISC (the ARM instruction set) is more efficient than x86 (the Intel instruction set). This is patently false, as explained quite thoroughly by Seeking Alpha contributor Ashraf Eassa in his article ARM In Servers: Be Skeptical In Buying The Hype. For those interested in the technical details of processors, it's a great read. For those who want the short version, Ashraf wittily sums this up:

    What is ARM? It's not magic. It's not the fairy-unicorn goddess of performance per watt.

    The general consensus is that Intel is only capable of making power-hungry chips suitable for Big Powerful Computers. The general consensus is wrong. Intel has been boosting performance and improving power efficiency simultaneously.

    Core: Cutting-Edge Technology Extending Intel's Technological Lead

    Let's start with their main Core line aimed at desktops, servers, and laptops. Intel already has a 2-year process lead over TSMC and GloFo on node size, and potentially a four-year lead on FinFETs (nonplanar transistors). Beyond this, Intel is investing in significant R&D (to the tune of >$2B/qtr) to improve their technology even further.

    Much of this investment is focused in reducing power consumption by improving performance per watt. Compared to Ivy Bridge (the current line of chips), Haswell, Intel's next tock, offers 20x lower idle power draw and 2X the GPU performance at the same power draw. This comes after significant power efficiency improvements in Ivy Bridge. The net effect of these efficiency improvements, per PCWorld:

    Some new Haswell chips will consume under 10 watts of power and deliver performance similar to Ivy Bridge chips drawing 17 watts of power. But Haswell can deliver double the performance compared to Ivy Bridge on the same power consumption, Intel said.


    PC makers have quoted ultrabooks with Ivy Bridge delivering battery life of between six and eight hours, and up to 10 hours in some cases. The new chips could give convertible ultrabooks battery life of more than 12 hours, and perhaps up to 20 hours.

    As I mentioned earlier, any battery life advantages that ARM-based tablets currently have are very quickly eroding in terms of pure battery life - not to mention, a real processor actually has some mojo and can perform serious computing tasks. I remember my first laptop, circa 2004, which got 3 hours of battery life (if I was lucky). My two-year-old laptop, running a Westmere i5, gets 5-6, and is infinitely more powerful than my first one. Haswell-powered laptops/Ultrabooks (in the future, Ultrabook and laptop will be one and the same) will once again deliver significantly more performance at a significantly lower power envelope. Haswell (full write-up from Anandtech here) offers other benefits too, like 2x the graphics performance of Ivy Bridge. In summary, Haswell is one of the most impressive upgrades Intel's ever made.

    Haswell will be out mid-2013, meaning by next year, all concerns about Intel's power efficiency should be laid to rest. But it doesn't stop there. Broadwell, the 14-nm shrink (tick) due for 2014, will revamp GPU architecture resulting in further improvements, and in addition, be a fully-integrated SoC.

    There are other, more subtle improvements as well. One of these is Intel's continued commitment to parallel processing. You may have noticed that after the introduction of dual-core processors, we haven't seen a widespread jump in core counts. It's theoretically possible to make processors with far more than 2 or 4 cores, but it's not being done. Why?

    Well, to put it in non-technical terms, it's not always as simple as "more cores = better." There are a lot of reasons for this, but as just one example, imagine a situation where you have one paper document and a bunch of people trying to cut out parts of it. You could theoretically have a few people doing this at once, but you're never going to get 16 people doing this at once. So even if you hire 16 people, you're not going to get more "performance" from them than you will from 8 - and since they're sitting unused, there's a significant cost. In processor terms, that cost is power.

    This is a very crude simplification of just one of the aspects; for a more technical explanation, check out this fantastic article from Anandtech. A brief excerpt:

    The more cores you get in a system, the more threads you need to keep them busy. Unfortunately, doing so is not that easy: threads have to work on shared data and need locks to make sure that the end result is correct. A thread has to acquire a lock, which may necessitate waiting until another thread releases the lock. That can lead to serious lock contention which can result in bad scaling, even to the point where more cores (and threads) can lead to a performance loss instead of a gain.

    Intel is developing an instruction set architecture extension called Transactional Synchronization technology (TSX), which works to resolve some of the problems mentioned above. The linked Anandtech article has more details on the exact mechanism for those interested (aka, me). For everyone else, their conclusion:

    In theory, most application developers will not even have to change their code besides linking to a TSX enabled library. Time will tell if unlocking good multi-core scaling will be that easy in most cases. If everything goes according to Intel's plan, TSX could enable a much wider variety of software to take advantage of the steadily increasing core counts inside our servers, desktops, and portables.

    In another fantastic analysis, David Kanter of Real World Tech breaks down the Haswell microarchitecture, noting that peak performance is theoretically 2X Sandy Bridge, and concluding (emphasis mine):

    Looking back over several generations of Intel microprocessors, the changes are remarkable. Merom marked Intel's 'right hand turn', acknowledging that the Pentium 4 was not a viable long term solution because power efficiency is crucial to success. Starting from Merom, Intel's design teams embarked upon a relentless journey of continuous improvement with each major architectural change.

    Intel's Sandy Bridge core served as an impressive starting point, with unmatched performance in the x86 ecosystem. Haswell builds on this foundation, with powerful ISA extensions and a substantially more aggressive execution core and cache hierarchy.


    In summary, Haswell is a superb new architecture that will carry Intel into new markets and a new era of competition, not only from AMD, but also the ARM ecosystem. Ultimately, products will reveal the performance and efficiency advantages of the Haswell family, but the architecture looks quite promising, a testament to Intel's design team.

    There's much more to the story, of course, and I fully recommend reading the entirety of Kanter's very detailed explanation, but I don't have a degree in computer architecture and you're likely getting tired of reading geeky tech stuff. Suffice to say Intel has a lot of brilliant PhDs working on a lot of cool things; the information is out there for anyone who wants to read more.

    Mobile: Atom's The Underrated Underdog

    It's pretty clear that Intel's Core processors will continue to more than dominate in notebooks and high-end tablets/convertibles, so now let's move to the ultramobile side of things. The perception is that Intel sat on its hands and ignored mobile, but that isn't true. Intel's shipped over a billion SoCs, and it's only going to get more competitive going forward. The overall situation is summarized quite aptly by CNET in an analysis of the latest Atom iteration:

    Here's how Anandtech summarized the Atom Z2460 platform. "Today it appears to deliver better CPU performance than anything on the market, despite only having a single core. GPU (graphics processing unit) performance is still not as fast as what's in the A5 but it's competitive with much of the competition today, and I fully expect the dual-core version of Medfield to rectify this problem."


    And there's another surprise that Intel is holding close to its vest right now: "Silvermont." That chip will be a completely redesigned Atom that will debut on 22-nanometer manufacturing process technology. The chip promises mainstream laptop-like performance for smartphones. And that story gets even better when Atom jumps to 14 nanometers via "Airmont."

    I think it's safe to say that Intel will be a force to reckon with in the smartphone and tablet markets in the years to come.

    Benchmarks also suggest that Atom is already competitive versus peers like the Qualcomm (NASDAQ:QCOM) Snapdragon S4, ARM Cortex A9, and Nvidia Tegra 3.

    Of course, ARM isn't sitting on its heels either. The recently released Cortex-A15 is pretty powerful, but has too high a power draw to be utilized in smartphones:

    There are people who will look at the performance gap between Atom and the Cortex-A15 and conclude that ARM has won the day, game, set, and match. This is inaccurate. The current 32nm Atom parts (Medfield and Clover Trail) draw significantly less power than the old 45nnm hardware. More importantly, there's the fact that no one will be squeezing a 1.7GHz Cortex-A15 into a phone any time soon.

    The Cortex-A15, then, is more aimed at tablets and low-end notebooks - an area where, as I discussed earlier, Intel's core Core chips (I know, I know, bad pun) are kicking serious design butt. And in the ultramobile end of the spectrum, it turns out Intel is launching a major invasion into ARM's.

    See, here's something you have to understand - unlike the Core chips, Atom hasn't been on a tick-tock schedule. The CPU, to quote Anandtech, remains "mostly unchanged from what we first saw in 2008." So the current Atom iterations are basically Intel MacGuyvering a chip from 2008... and yet they're still competitive.

    However, Intel's bringing Atom onto the tick-tock cadence with Silvermont, a 22-nm tri-gate processor that brings a host of improvements like out-of-order architecture, which allows the CPU to execute instructions out-of-order rather than sequentially, which speeds up processing significantly.

    Leaked Intel documents (courtesy arstechnica) demonstrate that Bay Trail SoCs contain a bunch of other improvements, including GPU and WiDi. More features of Bay Trail (from other leaked documents) available here.

    Meanwhile, Intel's somewhat unheralded entry into the smartphone market with their current iteration of the sad little Atom has largely been met with positive reviews. The Motorola Razr i, according to Verge, demonstrates that Intel's Atom is competitive to say the least. Emphasis mine:

    [Battery life] was another area of strength for Intel. In our standard battery test, which cycles through websites and videos with the screen set to 60 percent brightness, the RAZR M lasted seven hours and 22 minutes, while the RAZR i lasted a full eight hours and 42 minutes. Where the phones truly differ, however, is in standby time. The RAZR i managed to last 72 hours of regular use, including pushing email to two separate accounts, with 12 percent of its battery remaining. In contrast, the RAZR M will get you a full day's normal usage, but not much more. Both have strong battery life compared to many Android devices, but from our tests and experience, it's clear that Intel's chip is far more frugal with power than the dual-core Snapdragon S4.

    Oh, snap.

    [I know, I know. Another bad pun.]

    The main issue precluding U.S. usage is that the Medfield SoC in the Razr i doesn't support LTE. No problem, says Intel - we're on it. LTE products will be ramping through next year. And with the Atom seeing a 22-nm refresh and a jump onto the tick-tock cadence, wherein each year will see either a die shrink or new microarchitecture, the Atom will only get more competitive from here on out.

    There's plenty more to say here, but not a ton more room to say it. For a different perspective on Intel's mobile strategy, check out Intel's Mobile Strategy: A Tough Road To Victory by Ashraf Eassa.

    The essential takeaway: Atom is already competitive in the current generation. Next gen, ARM is in for a tough ride.

    Myth: The Front End Of "Mobile" Is All That Matters

    Truth: The Cloud Isn't Water Vapor

    Larry Ellison would applaud me for the reference, but he's probably too busy enjoying his own Hawaiian island.

    So the general argument is that more tablets/phones = fewer PCs = sad, sad Intel. I've already discussed why this isn't true above, but here's another reason:

    The cloud isn't made of water vapor.

    People discuss the cloud like it's some magical thing that magically exists, powered by magic. Unfortunately, that's not true. The "cloud" is nothing more than a collection of servers that communicate with each other and the user. "Cloud" computing could more accurately be described as "distributed" computing. Computing is still being done; it's just done off-site. When you upload something to Dropbox or Google Drive, the file doesn't just magically arrange its bits and bytes in the ether. It's stored on a hard drive somewhere, with lots of other files, and later you can go back and access it.

    Now, tablets/phones. They're designed specifically to have less storage and computing power locally, and rely more on connectivity and the "cloud" to do their work for them. Well, guess what - as established above, the cloud isn't water vapor.

    So no matter what happens to PCs (and do note that PCs will survive), the server market will continue to grow:

    Although the server market is mature, it will experience strong growth through to 2015, as large customers such as Google, Amazon and Facebook will demand servers to fuel their datacentres' growth, says Gartner.

    [...] Demand... will also be supported by... increasing use of... tablets.

    I shortened the quote a little to remove unnecessary verbiage; feel free to click the link to see the full article. Even ignoring the potential for growth, Intel's server revenues look to be fine, especially since Haswell will help lower power usage in server clusters.

    Intel is also getting into the cloud business with its own storage solutions aimed at consumers/SMBs.

    Of course, it wouldn't be a business segment if there weren't the ever-hyped threat of ARM. Not only will ARM eat Intel's lunch in mobile, say analysts, but it will eat Intel's dinner in servers too.

    Unfortunately, ARM-in-servers is all hype, no substance. Intel's servers are on solid ground already, with Sandy Bridge designs. From my old friend Anandtech:

    Our conclusion about the Xeon E5-2690 2.9 GHz is short and simple: it is the fastest server CPU you can get in a reasonably priced server and it blows the competition and the previous Xeon generation away. If performance is your first and foremost priority, this is the CPU to get. It consumes a lot of power if you push it to its limits, but make no mistake: this beast sips little energy when running at low and medium loads.

    As established ad nauseam, Haswell is the most technologically impressive architecture Intel has put out in a while, so "blows the competition away" just got better.

    There's more to say here, but someone else has said it already. Check out (who else?) Ashraf Eassa's articles AMD: The Ugly Truth Behind The ARM Partnership and Intel Keeps ARM At Bay In Micro Servers With Avoton for clear analysis that cuts through the hype.

    Myth: Intel's Fabs Are A Liability

    Truth: Intel's Fabs Are A Strength

    Since everything ARM does is automatically sexy, it stands to reason that Intel's fabs must be utterly, totally useless. ARM is cool because it's a design house. They don't manufacture! Who wants to do that? That gets your hands dirty.

    Well, suffice to say this is yet another myth that needs to bite the dust. Let's start by examining exactly how awesome (or not) the fabless design model is. We've already discussed Intel's process lead on TSMC and GloFo and how that gives them a major advantage, but let's set that aside for a moment and look at this from a purely logistical standpoint. Having fabs means Intel produces its own chips. On the other hand, pretend you're Apple for a second. You're an ARM licensee, and you're fabless, so if you want chips, you need a foundry - that is, TSMC, GloFo, or Samsung. How's that working out? Via ExtremeTech,

    the chairman of TSMC said the company will yet again fail to meet demand in the third and fourth quarters of 2012, with 2013 being pegged as the soonest date that its 28nm process will be able to keep up with demand

    Via MarketWatch,

    Samsung has begun to worry that its supply chain is broken, at least partially

    Via Forbes,

    The 'lag' probably points to Qualcomm's ongoing 28nm supply chain problems. The MDM 9615 chipset that supports TD-SCDMA as well as many LTE networks may have also been impacted by the shortage, forcing Apple to delay a China Mobile launch until the issues have been sorted out.

    And all these supply chain issues lead to problems like this:

    Samsung Electronics , the world's largest technology firm by revenue, raised the price of mobile processor supplied to Apple Inc. by 20% recently.

    For what it's worth, that bit of news was later disputed, but either way, it does demonstrate the risks of outsourcing manufacturing. When supply is short, you either pay more or can't sell product - pure and simple.

    Now let's turn to Intel, which has the opposite problem:

    This brings us to Intel's unexpected revelation during their earnings call and the primary reason we're covering this: idle fabs and inventory buildups. Due to a buildup in inventory and a desire to prevent further buildup in what Intel is projecting to be a weak quarter, Intel will be taking the unusual step of letting quite a bit of fab capacity go idle. For Q4 Intel's fab utilization will be sub-50%

    Most of the idle capacity is on the 22-nm process, giving Intel plenty of manufacturing capacity to handle both Haswell (22-nm) and Atom when it hits the 22-nm refresh.

    The benefit of having the foundry in-house is twofold. First, you avoid the type of issues that Apple is currently facing in being supply-constrained. If you can't ship product because you literally don't have any, you lose by default to competitors who do have product, whether or not their product is better. Second, you get realtime collaboration between the design and manufacturing team on exact specifications, which is part of the reason why Intel's manufacturing process has left everyone else in the dust.

    There's an ancillary benefit, too: you can then work-for-hire.

    Intel has announced that it has opened up its best-in-class 22nm FinFET process to numerous, as-yet-unnamed third parties. In effect, Intel is now acting as a built-to-order foundry, much like TSMC, GlobalFoundries, IBM, and Samsung.

    This isn't a major revenue driver right now, but is certainly something important to consider moving forward. Intel literally has a two-to-three year lead over everyone else in the business. This means that when you want cutting-edge chips made, you turn to Intel. Intel is in talks with Cisco to fab custom silicon and has made FPGAs for Achronix.

    All in all, if I had to choose a business model after reading the above facts, I'd take Intel's.

    Myth: Intel Is A One-Trick Pony

    Truth: Intel Has Tricks Up Its Sleeve

    One of the most inaccurate myths out there about Intel is that they just do big, beefy chips for servers and gaming desktops. Nope, not true. In recent times, Intel has begun a rather strong push into other areas, to the point that they're providing end-to-end solutions for all things compute.

    In this section, I'll briefly review notable developments across a few of the less-covered segments of Intel.


    Intel earned the moniker Chipzilla for good reason; it's made its name designing and manufacturing chips, aka processors. But it does offer a bunch of other tech that flies under the radar.

    Consider, for example, the statistic cited earlier - Intel has shipped a billion SoCs for mobile applications, which include cellular baseband, RF and power management on a single chip. In fact, prior to 2010, the iPhone used an Intel modem. Then Apple switched over to Qualcomm to gain compatibility with Verizon/Sprint LTE and CDMA networks, a problem which Intel is resolving. Per PCMag, an unnamed Intel engineer stated that Intel "will be able to put an unlimited number of bands on a single LTE modem, possibly as soon as late next year." This would solve a number of technological headaches, especially that of having to design different versions of phones for different markets due to the variations in bands. A single modem compatible with all/most bands worldwide would be a very strong offering significantly differentiated from anything currently available, and is like a reason Intel execs believe the $2B Mobile Communications segment could grow by 50% next year. Intel's foray into territory traditionally occupied by Qualcomm and Broadcom (BRCM) was accelerated with the 2010 acquisition of Infineon Wireless. (And while we're on the topic of wireless, Intel's working on some neat wireless charging technology that doesn't require contact plates.)

    Back to communications, though - those who think Intel hasn't been paying attention to the modern mobile era haven't been paying attention. At the 2012 Developer Forum, Intel demonstrated Rosepoint, which is essentially a processor with on-die WiFi, a useful feature for smartphone SoCs. Infineon technology is being leveraged, with the end-goal being a fully-integrated SoC including everything necessary for connectivity.

    Intel's efforts on the end-user hardware side of the equation are certainly strong, but the company isn't stopping there. On the other side of the equation are the massive cellular networks being built out to accommodate the explosive growth in mobile data. China Mobile has partnered with Intel (among others) to work on something called Cloud-RAN, short for Cloud Radio Access Network. Essentially, this involves shifting base-station processing to off-site data centers using software-defined radio, which offers numerous benefits, primarily reduced hardware costs and increased efficiency via lower power consumption. Given the sheer scale of China Mobile's network (they're projected to add 350,000 base stations by 2014), this is a pretty big partnership for Intel.

    As with previous sections, I could get into a lot more technical detail, but this is intended as an overview. This 48-page white paper from China Mobile provides a more in-depth explanation of the technology.


    To the average person on the street, high-performance computing might mean the $1500 desktop their 20-something kid uses to shoot aliens all day long. In reality, though, high-performance computing is an umbrella term for machines colloquially referred to as "supercomputers." These aren't used for playing games; they're used for solving complex problems ranging from astrophysics models to protein folding to drug interactions.

    Because of the somewhat esoteric applications of supercomputers, purchases tend to be somewhat sporadic. You can count on commoditized items like RAM turning over fairly quickly, but it's not every day someone walks into the store and says "hey, I need to model protein folding, show me what you've got."

    A lot of HPC to date has been based on the GPGPU concept - general purpose computing on graphical processor units. For a more detailed explanation of GPGPU, check out this Gizmodo article. Short version: GPUs aren't necessarily as fast or powerful as CPUs at processing complex instructions, but they're faster/better at pure number crunching. Put a bunch of them together, and you've got a supercomputer. (Tech-savvy people are likely cringing right now; my apologies for the gross oversimplification.)

    Ignoring the finer points of supercomputer construction, let's just focus on the processors. For a while, the far-and-away leader in the HPC space has been Nvidia's Tesla line (geeky glory here from Anandtech) which commands 90% of the HPC space, with the balance going to AMD.

    But never fear, Intel's here. Intel recently introduced the Xeon Phi (and yes, if you're wondering, that's another Anandtech link, it's always an Anandtech link). The Xeon Phi isn't as powerful in raw terms as the Nvidia Tesla 3 (and also note that Xeon Phi isn't a GPGPU, but competes in the same market). However, it does offer one pretty major advantage:

    One of the big selling points of the Xeon Phi is that you can simply run multi-threaded Xeon code on the Xeon Phi. If you want to get decent performance out of the Xeon Phi, that code should be compiled with the Intel C or fortan Compiler and the Intel MKL math libraries. In that case, Intel claims many "typical applications" get about 2 to 2.5 higher performance with the Xeon Phi. A few exceptions get more.


    The point is of course that the time investment to get there is a lot lower than is the case with CUDA on NVIDIA's Tesla K20. We have heard from several companies that debugging CUDA code is still a pretty daunting experience. One good example can be found here. The maturity of the Intel compilers and high performance software is a big plus for the Xeon Phi.

    So essentially, both companies/products have their pros and cons, and they're working hard to leverage the pros and shore up the cons. I expect future Intel processors to be even more competitive on the raw performance side, and I similarly expect Nvidia to continue providing top-notch support for developers. I don't think Intel will unseat Nvidia as top dog, but it should prove a worthy competitor. (For more analysis on this, check out Nvidia: The No-Nonsense Explanation For The Selloff.)

    A word on finances: this isn't going to one-handedly double Intel's bottom line, but the general theme of this article is that Intel is diversifying into a lot of areas, and the benefits will start to accrete. The total addressable market for GPGPU/HPC was estimated at just north of $1B by Nvidia in 2009, and overall revenue for HPC technical servers this year is roughly $12B per IDC, projected to grow at ~7% CAGR. Note that revenue for servers and revenue for chips are two separate but related issues, as chips are but one component in the server. Nonetheless, this should provide some idea of the relative scale of the opportunity.

    Modeling growth for individual components is somewhat problematic, as supercomputers aren't particularly high volume and major purchases are likely somewhat levered to the macro situation. (For full disclosure, this is pure speculation here on my part, but I just can't see the following conversation going so well. Scientist: "Hey boss, can we buy a really expensive supercomputer?" Boss-man: "Why? We're barely breaking even this quarter!" Scientist: "Well, I wanna fold proteins faster...") Nonetheless, as the economy recovers, science marches ever forward, and competition brings prices down, I anticipate the TAM growing significantly. Since Nvidia currently owns the lion's share of the market, and the market is growing, this situation can only end with Intel gaining revenue/income.

    Beyond the actual processors for HPC, Intel is also working on integration of the "interconnect" - basically, what allows the processors to talk to each other. One of the companies currently playing in this growing space is Mellanox. Three top-notch SeekingAlpha contributors - Infitialis, Kerrisdale Capital Management, and Akram's Razor - published, respectively, three excellent articles about Mellanox and why Intel's about to beat its pants off:

    I won't steal their thunder; they explain the situation far better than I ever could. In summary, Intel is once again developing a major technological lead that will irreparably wreck Mellanox's business model. Intel acquired InfiniBand technology from QLogic and is all set to leapfrog Mellanox. Badly. So basically, chalk up dominance for Intel in another small-but-growing segment of the compute space.


    Followers of the tech space are likely aware of the super-low P/Es the market has assigned to Western Digital (NYSE:WDC) and Seagate Technology (NASDAQ:STX). While this is partially due to concern about the ability of the HDD duopoly to perpetuate the pricing power they currently enjoy, it is also due to questions about the continued existence of the HDD industry. SSDs offer blazing speed, quieter operation, improved battery life, and improved durability. After installing an Intel Series 330 SSD in my laptop, I can attest that they're certainly the future. The only downside is cost. As a rule of thumb, SSDs are roughly 10x more expensive per GB than traditional HDDs. So it's really a question of how long the technology takes to achieve cost parity with HDDs (or, at least, enough cost parity for the enterprise and non-power-user consumers to adopt).

    Nonetheless, given the numerous advantages of SSDs, it's not a question of if, but rather when. I imagine that HDDs will continue to see significant use, especially for long-term storage of infrequently-accessed data, but SSDs are growing at a fairly rapid clip. IHS iSuppli projects $7.5B in SSD industry revenue for 2012, after 2011 saw $5B in revenue and 2010 saw $2.4B. IDC expects shipments to grow at a 51.5% CAGR through 2015, though it's worth noting revenue will likely grow at a slower pace as cost/GB continues to come down.

    The SSD industry is fairly fragmented as of now, with players besides Intel including Samsung (OTC:SSNLF), Micron (NASDAQ:MU), SanDisk (SNDK), SK Hynix, and OCZ (NASDAQ:OCZ). Industry consolidation along the lines of what happened in the HDD industry seems a fairly likely outcome, as evidenced by multiple buyouts and the struggles of pure plays like OCZ. Intel itself is partnered with Micron.

    And is Intel pushing the envelope in SSD technology? Why, yes. According to AnandTech's analysis of Intel's 3rd gen controller:

    The Intel SSD DC S3700 appears to be a very promising new architecture from Intel. If it ends up performing as Intel promised, the S3700 controller could be the beginning of a new era in SSD performance - one focused on consistency of performance, not just absolute performance.

    As a company that's not only on the bleeding edge of technology, but also the definition of well-capitalized, Intel looks poised to succeed in this emerging industry, holding a 7.8% market share by revenue in Q2.

    Will Intel dominate the SSD industry like it has the CPU industry? Maybe down the road, but unlikely in the near term - competition right now is fierce. However, the important takeaway is that Intel's diversification into emerging, high-growth subsectors of the tech world will be a major revenue driver. According to Ross Seymore of Deutsche Bank, "the NAND Solutions Group€™'s (NSG) revenue has tripled since 2008 and has the best margins in the NAND industry." In short, Intel is well positioned to take advantage of the strong secular growth trend in SSDs.

    Software and Security

    I'm integrating these because security seems software-ish to me, even though soon it may not be, entirely.

    So let's start off with security. Intel bought McAfee, which is now downsizing, but still doing fine. The deal was pricey, at over $7 billion. Intel isn't generally in the business of spending sprees, so the question is - why?

    The answer lies in the future. To quote Justin Rattner, Intel's CTO, in the future, everything that computes will connect. And that sounds cool, until you realize there are significant problems.

    If you'll allow me to go on a tangent (and you really should. I mean, you've read 5,000 words already), I'd like to share some insight from a seminar I got to attend with a security guy from Texas Instruments (NYSE:TXN).

    He was talking about the all-connected future. He mentioned those ads on TV, where the guy gets in his car after a date and tells his car to check his newsfeed, and a post from the girl pops up talking about how awesome the date was, and it's cute and yet totally stupid because that would never happen in real life. That aside, his car is connected to the internet. Something that is connected to the internet can be hacked. What if his car was hacked? What if his car, against his will, drove him to a bad neighborhood where he was subsequently kidnapped and held for ransom?

    Here's another example. What about connected medical devices? They store the patient's vitals, literally, and email them to the doctor, so doctors can then analyze to monitor how blood glucose was doing at one-day intervals. Sounds great, and everyone's happy, until they're not:

    He managed to intercept the wireless control signals, reverse them, inject some fake data, and then send it back to the pump. He could increase the amount of insulin injected by the pump, or reduce it. In both cases the pump showed no signs of being tampered with, and it did not generate a warning that he was probably about to die.

    "I can get full remote control," Radcliffe said. "If I were an evil hacker, I could issue commands to give insulin, without anyone else's authority. This is scary. And I can manipulate the data so it happens in a stealth way."

    Now luckily, the aforementioned hacker was in fact trying to hack his own insulin pump, out of paranoia that someone else could do it.

    So here's the thing. All of us know someone who has a life-saving medical device, be it an insulin pump, pacemaker, or something else. In the future, if all these devices are connected, what's to stop hackers from exploiting weaknesses in the devices to hold people for digital ransom? "Wire me money, or I'll kill you remotely." You may think it's unrealistic, but how much farther a step is it than the thousands of cyberattacks launched every day to steal money, identities, or sensitive information?

    These examples may be extreme, but sadly, some people just want to watch the world burn. But let's turn to less extreme examples. Banking and shopping online can be enough of a security risk as it is on computers running a good antivirus on a safe network. But what of the ultramobile era, when we're constantly on the go, connected to networks that thousands of evildoers could potentially tap into? When we scan a check to deposit it into our bank account, or pull out our phone to make a trade, who is going to stop someone from taking it all away from us?

    Paranoid security guys. That's who. In an interesting NetworkWorld interview with McAfee Co-President Mike DeCesare, it was revealed that Intel's goal in pouring R&D into McAfee is to build security into the chipset - hardware-assisted security. The technical details are fascinating but too complicated for the scope of this article. The financially important part:

    we have hundreds of companies that use our security embedded, such as automotive manufacturers.

    As more and more devices become "smart," there will be more and more demand for this sort of security, which consequently equals more and more demand for Intel's security-integrated offerings.

    Beyond just security, though, Intel offers an impressive software portfolio that led Brian Caulfield of Forbes to call Intel the "biggest software company you've never heard of." As was referenced briefly in the HPC section, Intel often uses software to sell hardware - by offering compilers, supporting Linux and Android, and helping programmers fully leverage parallel processing via transactional synchronization, Intel is creating an ecosystem dependent on its x86 hardware.

    The list of software goes on, including things like physics modeling software for video games. Software alone likely won't be a major revenue or income driver, but its impact on hardware sales is too critical to be ignored. It's one of Intel's underrecognized weapons.

    Smart Devices. And Stuff.

    Okay, so this section is going to be short, but I doubt you'll mind. If anyone can find it, there was a video a while back with an Intel executive (I think Paul Otellini) discussing the future of compute, wherein every device is "smart" and connected to other devices.

    The New York Times was only half kidding, then, when they said "prepare for the 3.0-gigahertz, Web-ready, Intel Inside toaster." Intel is inside more and more computing devices all over the house, including certain Sony TVs and set-top-boxes.

    This has traditionally been the domain of ARM. But with Atom chips getting more and more competitive, to the point where they may soon leapfrog ARM designs, you can expect to see Intel inside some smart devices in your house. At this point, and likely for the next few years, it's not material. But it's something that could be an area of growth in the long-term.

    So in summary, no one of these segments will become Intel's bread-and-butter. But after analyzing the facts, it's pretty clear that Intel doesn't just make computer chips. Intel has recognized the need for and opportunity in diversification, and they're taking full advantage.

    The market, however, hasn't recognized this, which gives you an opportunity of your own to take advantage of.

    Earnings (Macro), R&D

    By this point, I hope I've established several things:

    • In core competencies (desktops/servers), Intel has established a major technological lead.
    • In new areas (mobile/HPC/SSDs/etc), Intel has competitive offerings that will likely gain market share moving forward.
    • Intel has recognized the need for diversification and is quickly moving towards providing end-to-end compute solutions.

    The technology is impressive; there's no way (that I can see) to objectively deny that, unless you're misinformed. Which most people are. But even with all of this, the million-dollar investor's question remains. What about earnings?

    Let's take a quick peek at earnings from the recent quarter. Even though my case for Intel is more long-term in nature, I think it will be instructive.

    The summary, from Intel's Q3:

    Well, that's depressing. Must be all Intel's fault. Or is it? From Dell:

    And finally, the warning actually started with vaunted ARM:

    ARM warned of slower sales ahead, it said many of its flagship customers - which include Texas Instruments and Qualcomm - are planning around a slower holiday season than usual, partly because of the eurozone crisis.

    Yeah, sounds macro-ish to me. Not to mention that Windows 8 was released, which obviously delayed purchases right before. As I said earlier, macro + Osborne effect = sad face. (I promise that's a 100% scientifically accurate equation.)

    Now let's dive deeper into the earnings report and note something I think has been overlooked.

    Circled in red is Intel's R&D expense. In the year-ago quarter, Intel spent $2.14B on R&D. This year, they spent $2.605B - a difference of roughly $500M.

    Circled in blue is Intel's Net Income. In the year-ago quarter, Intel made $3.47B. This quarter, Intel made $2.97B. That's a difference of... you guessed it, $500M.

    So essentially, if you strip out R&D, Intel managed to make roughly the same profit on nearly $800M lower revenue, which, as established above, is largely macro-driven. Of course, gross margin was also lower by roughly $500M, and you have to add taxes back in when stripping out R&D - the most accurate comparison would be income before taxes. Adding it back in there results in a year-on-year differential of roughly $500M, which is accounted for by the drop in gross margin due to the drop in revenue. Whichever way you slice it, Intel's quarter isn't as terrible as everyone's making it out to be.

    The implications of this cannot be understated. It's irresponsible to focus on Intel's "earnings drop" without also noticing that R&D spend, year-to-date, is up 25% over R&D spend over the same period last year. Investors want Intel pushing hard on mobile and other arenas, and that's what they're doing. You can't talk out both sides of your face and decry Intel's lower earnings while subsequently clamoring for an ever-stronger push in mobile. Intel's pouring money into the future, and the results are clear: success. Haswell, Avoton, Atom, Xeon Phi - these are all names to remember. In the coming quarter and year, they'll be major revenue and earnings drivers for Intel.

    Intel's strategy is to do things right. And they are doing things right.

    It's going to pay off.


    The statistics don't lie; Intel is cheap. The slowdown affecting Intel is temporary rather than structural in nature. With a P/E around 8.8 and a dividend yield of 4.5% at a sub-40% payout ratio, Intel, simply put, is a stock in the bargain basement.

    So let's do a little bit of valuation using an earnings forecast. Because it's my favorite thing to do, I'll use bizarrely brutal assumptions, just to give myself a margin of safety built into my worst-case calculation. So let's assume Intel starts out with...

    • $52B starting revenue (if Q3 occurred four times, we'd be at $54B)
    • 4% revenue growth each year (well below expected)
    • 21% starting profit margin (below this quarter's 22% and last year's 24%)
    • Half-a-point decline in profit margin each year
    • No P/E expansion

    At the end of this bizarrely depressing scenario, you haven't lost any money on Intel. All the while, you're collecting a 4.5% dividend that has grown rapidly, not to mention shares are being bought back, boosting your share of the company. That's the awesome part about Intel at the current valuation - in the worst case scenario, you've bought a bond that earns you 4.5%, which is a whole lot better yield than you're going to get in the current environment. (Note that due to Intel's current 2-3 year lead over competitors in process technology, this really is a worst case scenario.)

    Let's now go to a more optimistic scenario where I boost current profit margin to 22%, assume the same decay in margin, boost revenue growth to 6%, and assume gradually increasing P/E:

    You basically get 10% capital gains per year, plus the 4.5% dividend. Not bad for a middle-of-the-road scenario.

    And finally, the model I'm personally projecting, with 8% CAGR in revenue from the currently depressed level and protected profit margins:

    Now you're looking at doubling your invested money, with stock buybacks and dividends adding to your gains.

    And that's why I'm long Intel.

    Conclusion, and a Note on Management/Strategy

    Intel has enough momentum in our core business and enough assets that we're going to do this right. And we're going to win in the long run. - Intel CEO Paul Otellini

    Despite the fact that, much to my regret, Paul Otellini is stepping down as Intel's CEO, I believe the thesis for Intel is pretty clear, and even my most optmistic valuation model could be somewhat conservative, as Otellini projected double-digit CAGR back in 2010. I believe him, because after careful and thorough analysis, I've concluded that Intel is:

    • Dominating its core comptencies, and breaking ground with even more advanced designs
    • Expanding into numerous other areas of computing, providing solutions that are either superior to or competitive with established market leaders
    • Projecting the future and working on solving technological problems before they crop up (EUV, quantum come to mind, though I haven't discussed them at all)
    • Rewarding shareholders with generous dividends and buybacks
    • Extremely misunderstood and undervalued by the market

    Intel has many opportunities ahead of it, and at the current valuation, it doesn't even have to succeed with those to do just fine as an investment. Sentiment is so universally negative that all Intel has to do is not fail. Given their superb technology, it's fair to say that Intel is clicking on all cylinders, and barring a Lehman-style market collapse, I fully expect this to be a $40 stock by 2017 at the very latest.

    A note on the soon-to-come change in management: it is, obviously, critical that Intel continue to strategically execute in the way it has over the past few years. However, I have full confidence in Otellini and the Intel board to choose a qualified and suitable candidate. Intel has so much going for it, technologically speaking, that it would be exceedingly difficult for a CEO to screw things up so badly that there would be further downside from the currently depressed valuation.

    In summary: Intel is a stock you need to hold in your portfolio for the next five years. At worst, it's a bond with compounding, growing annual returns above 4.5%. At best, you're invested in the leading-bar-none technology company of the next decade. These are the conclusions I came to when I started buying at $26, and as Intel has declined to $20, I stand by them. I'm glad Intel has declined so far - it gives me the opportunity to buy more. It's my largest and highest-conviction position by far.

    Comments and critiques are appreciated as always.

    Disclosure: I am long AMD, DELL, HPQ, INTC, MCD, MRVL, MSFT, NVDA, STX, TXN.

    Additional disclosure: I may initiate short positions in ARMH, MLNX at any time. The long position in AMD is very small and very speculative; please do not interpret that position (or any position) as an endorsement of the stock. These are my personal views and should not be taken to represent the views of Seeking Alpha.

    Stocks: INTC
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Comments (19)
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  • Dividend Growth Machine
    , contributor
    Comments (1653) | Send Message
    Samir: Excellent article, one of the most in-depth analyses I've read on SA in a long time. Thanks!
    20 Nov 2012, 01:41 PM Reply Like
  • SA Editor Samir Patel
    , contributor
    Comments (163) | Send Message
    Author’s reply » Much appreciated. Glad you liked it!
    20 Nov 2012, 03:19 PM Reply Like
  • Alan Brochstein, CFA
    , contributor
    Comments (7949) | Send Message
    24 Jan 2013, 04:57 PM Reply Like
  • DAG Investments
    , contributor
    Comments (4129) | Send Message
    Thanks for the excellent analysis, Samir. It's reassuring to see that someone so knowledgeable has such high conviction regarding Intel. Perhaps the only thing Intel is guilty of is the same drawback as any other company of its size -- being too big to adapt to marketplace changes as quickly as competitors that are a tiny fraction of the size.
    20 Nov 2012, 03:09 PM Reply Like
  • SA Editor Samir Patel
    , contributor
    Comments (163) | Send Message
    Author’s reply » Intel's scale is actually an advantage to some degree. First, they won't have supply issues for any of their 22nm parts, which will allow them to extend their lead over competitors who are still struggling to fab at larger node sizes. Second, in some areas like NAND flash where commoditization is rapidly occurring, Intel is well-capitalized enough not only to absorb any downturns that may occur, but also to potentially snap up smaller competitors that would go under without assistance.


    Nonetheless, your point is definitely valid, but keep in mind that at this point, both Samsung and Qualcomm have higher market caps. So all the major industry players are thus facing similar issues in terms of being so massive.
    20 Nov 2012, 03:21 PM Reply Like
  • DAG Investments
    , contributor
    Comments (4129) | Send Message
    I agree Intel's size is a significant advantage over the long run, which is really all that matters. I just think that, in the short term, Intel didn't adapt to the changes in the marketplace quickly enough. Perhaps that is partially due to size, but since Samsung and Qualcomm seem to have dealt with that issue better in the short term, perhaps there is another culprit such as culture or something else. In any case, I'm confident that this low point in Intel's stock performance won't last.
    20 Nov 2012, 03:40 PM Reply Like
  • uls2
    , contributor
    Comments (80) | Send Message
    Samir, I go one step further than DividendGrowthMachine: I find your article the best and most thorough analysis on INTC that I have read for a long time, anywhere. My compliments on it! I have not come across a conclusion you presented that I disagree with so far. Perhaps because I did not take much time for reading, but I suspect also because your conclusions make a lot of sense.


    And the article is well written too. I found it quite readable despite its length. Thanks also for all the links you supplied for digging deeper into several subjects, plus a brief summary in most cases.


    I am convinced that you have provided a great service to SA readers.


    PS: please explain the meaning of "Please feel free to contact me through PM"
    20 Nov 2012, 03:10 PM Reply Like
  • SA Editor Samir Patel
    , contributor
    Comments (163) | Send Message
    Author’s reply » uls2,


    Thank you for the exceptionally kind words. The great thing about Intel at the current price is that as I said in the conclusion, they don't even have to succeed - they just have to not fail and fall flat on their face. Margin of safety is built in. So even if some of my conclusions are wrong, which I don't think they are, but let's pretend they are. Say PC/server growth is slower than projected, or even if Atom isn't as successful as I think it will be, it really doesn't matter - the worst case scenario is already priced into the stock. When I started buying at $26, the bear case had some merit insofar as Intel's return as an investment would be slightly lower if they hit a bump. They did hit a bump (macro), and took it quite well, as I analyzed - and at this point, the market is basically pricing in no growth, meaning failure in ALL of their efforts. Given the technological superiority and/or competitiveness they've demonstrated, I have a very very hard time believing that this will be the case. So as I said, worst case, you're buying a bond with near-5% yield from a company that's going to pay you back (and more). Best case, you're sitting on a real winner.


    Glad it worked out - I was a bit scared by the length (ended up being 8,700 words) and I honestly could have gone longer, but I wasn't sure going deeper into the technology would have been helpful.


    PM = private message, I was referring to SA's internal messaging system allowing users to contact each other. I updated my profile to be more clear. Thanks for pointing that out.
    20 Nov 2012, 03:26 PM Reply Like
  • SA Editor Samir Patel
    , contributor
    Comments (163) | Send Message
    Author’s reply » My goal in writing this was to give investors a semi-comprehensive starting point for researching Intel. I got tired of seeing all the "PC is dying INTC is toast sell sell sell" arguments, because they're not backed by logic or facts, and I wanted to get an alternative (and imo, true) viewpoint out there.


    After reading this, if someone were to counter my points and provide a different take, I'd definitely be willing to listen and take their viewpoint into account. I don't ever have problems with people disagreeing with me, but I do like seeing it be supported - so I'd be curious to see an INTC bear write an article of this depth on the opposite side.
    20 Nov 2012, 03:32 PM Reply Like
  • barleycapital
    , contributor
    Comments (163) | Send Message
    Best article I have read on Intel. Well done! I'm long, long-term, and keep buying :)
    20 Nov 2012, 04:01 PM Reply Like
  • SA Editor Samir Patel
    , contributor
    Comments (163) | Send Message
    Author’s reply » Thanks!
    20 Nov 2012, 04:28 PM Reply Like
  • Julius Ferraro
    , contributor
    Comments (493) | Send Message
    Love the article. Soon Wall Street will figure it out. Love the piece on pc's but I don't agree with the mcafee purchase. Their phone support is the worst thing I've ever experienced
    20 Nov 2012, 04:21 PM Reply Like
  • SA Editor Samir Patel
    , contributor
    Comments (163) | Send Message
    Author’s reply » Thanks! I think the McAfee purchase provides good synergies but honestly I am not a fan of the price it was bought at - while I don't know the inside scoop, I feel like Intel could've acquired the needed security expertise cheaper. Nonetheless, now that it's integrated, it does offer an interesting angle on integrated security.
    20 Nov 2012, 04:28 PM Reply Like
  • SDS (Seductive Dividend Sto...
    , contributor
    Comments (4480) | Send Message
    Thank you for good analysis of Intel products. It is hard time for semiconductor technology (scaling, 450mm fabs, etc.) and Intel explores different venues in R&D to continue to be the leader.
    20 Nov 2012, 09:26 PM Reply Like
  • PineyCreek
    , contributor
    Comment (1) | Send Message
    I'm an investor with admittedly limited trading experience. I usually go for long term investment unless I'm really sure a short-term play will work. I already have a (to me) decent number of shares bought at 20-23 dollars per share. Do you think now is the time to strike and buy more, or do you think between the CEO leaving in May 2013 and the Q42012 call happening late January it will continue to trend down resulting in a better bargain? Most of the comments and articles I've read think that it will reach around the $18 per share mark.
    21 Nov 2012, 11:44 AM Reply Like
  • My Opinion on investing
    , contributor
    Comments (73) | Send Message
    Thanks Samir for a great article. I believe Intel to be a good buy at todays price and expect to see them rise again in the future. With the amount of cash on hand, great R & D, bettter than most dividend payers, what more could one ask. I will be long on Intel.
    10 Dec 2012, 12:05 PM Reply Like
  • clocks
    , contributor
    Comments (19) | Send Message
    This was a great read. I really like INTC at these prices.
    11 Dec 2012, 01:57 PM Reply Like
  • Mathieu Malecot
    , contributor
    Comments (1290) | Send Message
    INTC is at a great price again. not much to add here as this is very comprehensive. i think the qcom + dell + intc sharp investments are telling. these companies can play together and that is good news for investors worried about snapdragon versus intc chips.
    12 Dec 2012, 01:14 AM Reply Like
  • York Maksik
    , contributor
    Comments (10) | Send Message
    What an incredibly insightful, knowledgeable and thoroughly enjoyable article. I learned so much, thank you!!
    13 Feb 2013, 12:22 AM Reply Like
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