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Zacks Investment Research upgraded Intel Corporation (INTC - Analyst Report) to a Zacks Rank #1 (Strong Buy) on Jul, 1. With a strong return of 29.3% over the past one year and positive estimate revisions over the last 60 days; Intel is an attractive investment opportunity.

Why the Upgrade?

Over the past 60 days, 19 estimates for the current quarter moved higher. None of the estimates moved down over the same time frame. The trend has been pretty favorable too, with estimates increasing 13.0% from 46 cents a share 60 days ago to 52 cents today.

Meanwhile, Intel’s current year figures are also looking quite promising, with 22 estimates moving higher in the past two months, with no downward revisions. The consensus estimate also increased from $1.89 per share 60 days ago to $2.04 per share today, an increase of 7.9%.

The current optimism surrounding the stock can be attributed to stabilization in the PC market. Sales of PC processors to enterprises are growing, which forms the major revenue source for the chipmaker.

Intel is now taking steps to increase its foothold in mobile, wearables and the Internet of Things ("IoT"). It is trying to increase sales of its chips by entering the Smart TV market. In concurrence with these efforts, Intel got its chips into Google’s (GOOGL - Analyst Report) Android TV platform.

Android TV is likely to be a success, since the marketing effort is different. Google is focusing more on games instead of going for a head-on collision with TV content providers, so it may be able to grow into a solid competitor to Apple (AAPL - Analyst Report) and Amazon (AMZN - Analyst Report) TVs. The expansion of Google’s Android TV will create a larger market for Intel’s processors.

Intel’s tablet plans are also very focused. On the one hand, it entered into an alliance with China's Rockchip to help it build a position in the low-end tablet segment. On the other, it got its high-end chips into Microsoft’s flashy new Surface. Microsoft’s recent exchange offer to woo Mac users would therefore help Intel sell its high-margin Core i3 – Core i7 processors.

Intel’s strength in the data center and stabilization in the PC market are providing the cushion required for a very aggressive push to gain traction in mobile.

Intel also has good prospects in the IoT segment. In fact, the segment accounted for 4% of revenue in the first quarter of 2014 and was up 32.1% from last year.

Intel is the world’s leading manufacturer of microprocessors for personal computers. The company generates strong cash flows and returns value to investors through regular share repurchases and dividends. Therefore Intel shares look like a smart investment right now.

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