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Intel: More Than Just Laptops And PCs

Perfect Alpha profile picture
Perfect Alpha


  • Strong growth trend in data-centric business, mainly led by cloud computing infrastructure.
  • The PC business remains robust, with 8th-gen CPUs gradually infiltrating the market. Intel's partnership with AMD ensures near-monopoly in the industry.
  • The company has engaged in exploring different areas such as AI, drones and autonomous vehicles, which are expected to be executed in the coming years.
  • Strong buyback record and healthy dividends remain lucrative to income investors who want to taste the growth flavour of tech.

Intel (NASDAQ:INTC) had posted strong results for 2017, despite the "Spectre" and "Meltdown" security flaw within its CPUs. Operating performance has outperformed market expectations, and 2018E earnings continue to see strong growth as effects of the tax reform will materialise.


INTC EBIT Margin (TTM) data by YCharts

As shown, INTC has performed positively versus its peers.

Data, Cloud and AI: Powering INTC's Future

The strong growth of the Company’s results is mainly driven by the Data-Centric business unit. YoY revenue is up 20%, while operating income is up 59%. All sub-units of the business unit achieved over 10% YoY growth, with the Non-Volatile Memory Solutions Group (NSG) gaining 37% YoY due to the introduction of the Company’s Optane memory solutions to enterprise data centres. The Optane series is expected to continue its popularity given the demand for more efficient memory solutions.

The Data-Centric unit is expected to continue generating organic revenue for the Company given the strong growth in demand for cloud computing systems. As a key manufacturer for cloud computing operating systems, Intel has been posting healthy growth in this particular business as big players in the market such as Amazon (AMZN), Alibaba (BABA), Google (GOOG, GOOGL), IBM Corp. (IBM) and Microsoft (MSFT) are aggressively expanding their cloud computing services.

Source: Gartner (October 2017)

Furthermore, Intel has recently ended its joint development partnership with rival Micron Technology on 3D NAND (a type of non-volatile storage flash memory), which, from our perspective, is beneficial to the Company due to the fact that it has not been prioritising this project, and hence, more capex can be allocated to other projects. The Company is also hinting stronger research and development efforts into new niches such as autonomous driving, AR/VR/MR, drone technology, artificial intelligence, memory and 5G networks, deploying more capex into these sectors and with much of the executions being planned out in the following


INTC EV to EBITDA (Forward) data by YCharts

INTC PE Ratio (Forward) data by YCharts


INTC Consensus Recommendation data by YCharts

This article was written by

Perfect Alpha profile picture
I am mainly focusing on drone technology and covering related companies in the aerospace and defence and technology sectors. I am also a undergraduate Finance student at a top institution in Europe. I have over 3 years of equity investing, mainly in large cap blue chips, in the UK, US and Hong Kong markets.

Analyst’s Disclosure: I/we 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.

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