- Skeptical of the wisdom of the Atlera acquisition, BMO's Ambrish Srivastava has downgraded Intel (NASDAQ:INTC -2%) to Market Perform, and cut his target by $7 to $33.
- Srivastava: "We really do not see the opportunity/rationale that Intel is laying out for parting with ~$17 billion. Specifically, we do not concur with Intel's assumption of 7 percent CAGR for the business. Altera has grown at a negative CAGR of 2 percent in the midst of one of the more aggressive carrier CapEx builds we have seen."
- He also wants more details about the deal. "[W]e do not know ultimately how much debt Intel will end up issuing to finance the deal, potentially in the range of $7 billion to $12 billion, in the medium turn, it could lead to potentially reduced capital return via share repurchase..."
- Others have been more positive. Deutsche's Ross Seymore predicts the deal will be 3% accretive to 2016 EPS, and expects co-packaged CPU/FPGA server and IoT products to arrive by 2H16. JPMorgan's Halrlan Sur predicts as many as 1/3 of cloud server workloads will rely on integrated CPU/FPGA SoCs by 2020, and forecasts FPGAs will fare well in the industrial/auto IoT chip space.
- Meanwhile, as is its custom, Intel has unveiled a slew of new products at the Computex trade show. Among them: 14nm Broadwell desktop and notebook CPUs (Core i5 and i7) with integrated Iris Pro 6200 GPUs. Intel claims up to a 2x improvement in GPU performance relative to prior-gen Haswell parts to go with CPU performance and power improvements.
- Also shown off: 1) Thunderbolt 3, a next-gen connector that works with USB Type-C ports; it delivers up to 40Gbps of bandwidth and 100W of power, and can be used by external GPUs, dual 4K monitors, and 10G Ethernet switches (among other things). 2) The Xeon E3-1200 v4 line, the first Xeon CPUs to sport Iris Pro GPUs. 3) A new reference design for Intel's IoT gateway family (previous) that adds more CPU and packaging options. 4) New Pentium/Celeron/Atom CPUs and OS options for IoT products.