Markets | 1 year ago

Why Intel Corporation (NASDAQ:INTC) Is An Attractive Bet?

Intel Corporation (NASDAQ:INTC)‘s Kaby Lake release was met with ordinary reviews while critics are talking about AMD’s new Zen architecture. While Zen presents a threat to its client computing and data center business, the former’s progress from its Internet of things, programmable and security solutions business will reduce the loss.

The details

Intel’s relatively low P/E, stable growth, dominant technology and healthy dividend growth in growing markets turns it a spectacular equity to own in any portfolio. As per a Forbes report, Intel currently owns almost 99% market share in the growing market of data center processing chip. The same report states that tech giant Alphabet Inc (NASDAQ:GOOGL), which spent more than $12 billion in 2015 on cloud business, are purchasing these high-end server chips in the scale of 300,000 per quarter.

The company’s processing chips are in demand and get into the data center unit’s 40% profit margin commerce. Unfortunately, many tech investors are anticipating this high profit margin to diminish in imminent period. Advanced Micro Devices, Inc. (NASDAQ:AMD), Intel’s chief peer in the x86 CPU segment, has seemingly made remarkable strides with its Zen architecture whereas many consider Intel has turned stagnant.

As per a benchmark review by Hardocp, Kaby Lake I7-7700K provides a minimal performance improvement from the Skylake i7-6700k. In the last week of December, a French Hardware magazine published a Zen Benchmark and said with true eight cores, Zen achieves proficiency despite its limited frequency. It’s getting precariously close for Intel while giving performance equivalent to the Core i7 5960X.

AMD’s Zen CPUs can be competitive with company’s CPU products while cutting price by 20%. Analysts consider that Intel can post flat growth or even decline in client computing as well as data centers market in 2017. The company’s strong free cash flow has allowed the firm to invest in growing industries like Internet of Things, non-volatile memory, programmable solutions and cyber security.

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