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Intel (INTC) Hits 52-Week High: What's Driving the Stock?
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Shares of Intel Corporation (INTC - Free Report) hit a 52-week high of $47.64 on Dec 20, closing marginally lower at $47.56. The company has gained 38.4% in the past six months, outperforming the industry’s gain of 33%. The stock has a market cap of $202.46 billion.
What’s Behind the Rally?
Intel is the global leader in the microprocessors market in terms of market share and product performance. The company not only focuses on selling separate components but also on optimizing platform for specific markets, including mobile, enterprise and digital home.
The company recently announced Intel Stratix, the industry’s first field programmable gate array (FPGA) integrated with high bandwidth memory to accelerate workloads and keep pace with data explosion.
The newly added product will expand the onboard memory pool and add more bandwidth. We believe that the launch will improve scalability, reliability, power and density requirements of future HPC deployments.
Intel also announced substantial advances in its wireless product portfolio to accelerate 5G adoptions, alongside introducing Intel XMM 8000 series and Intel XMM 7660 series modems. The launch of Xeon Scalable, Core 8 chips, Myriad X and next-generation desktop processors are also key catalysts for thecompany.
The new desktop processors are expected to help Intel's gaming endeavors amid stiff competition from AMD and NVIDIA. Moreover, the launch of Core 8 is expected to boost PC market share.
Partnerships and Acquisitions
Intel has also been active on the acquisitions front. Its acquisition of Israel-based Mobileye, an autonomous vehicle technology provider, has enabled it to enter the autonomous car technology market currently dominated by NVIDIA and Qualcomm. The company’s continued investment in Internet of Things (IoT) and non-volatile memory storage, primarily targeting enterprise/data center customers, are also aiding the stock’s momentum.
Additionally, the company also partnered with Micron to develop memory technologies. This led to the production of the densest 3D NAND technology. Intel also launched Optane, its non-volatile storage (NVM) product based on 3D XPoint technology this year.
Earnings
Intel reported third-quarter 2017 non-GAAP earnings of $1.01 per share, which beat the Zacks Consensus Estimate by 21 cents. The figure surged 26.3% from the year-ago quarter and 40.3% sequentially.
The strong earnings growth was driven by better-than-expected top-line performance and operating margin expansion. Moreover, Intel Channel Alliance Program (ICAP) contributed 13 cents to quarterly earnings.
Revenues totaled$16.15 billion, up 2.4% year over year and 9.4% quarter over quarter. The figure beat the Zacks Consensus Estimate of $15.71 billion. After adjusting for the McAfee (formerly Intel Security Group) transaction, revenues grew 6%.
Its diversified product segments form the base of Intel’s data-centric business model.We believe that growing demand for server chips that are used in data centers from cloud-based service providers like Amazon.com, Alphabet and Microsoft is a key catalyst for Intel.
Moreover, from a valuation perspective, the stock looks very attractive as it currently trades significantly lower than the industry average based on a forward earnings estimate. This signifies huge upward potential. Intel currently trades at a forward P/E of 14.47x as against the industry group average of 23.30x.
Intel has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in the trailing four quarters, delivering a positive average earnings surprise of 9.75%.
NetApp, NVIDIA and Western Digital have long-term expected EPS growth rate of 11.34%, 10.25% and 31.12%, respectively.
Zacks’ Best Private Investment Ideas
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Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades from value to momentum from stocks under $10 to ETF and option moves from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even lookinside exclusive portfolios that are normally closed to new investors.
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Intel (INTC) Hits 52-Week High: What's Driving the Stock?
Shares of Intel Corporation (INTC - Free Report) hit a 52-week high of $47.64 on Dec 20, closing marginally lower at $47.56. The company has gained 38.4% in the past six months, outperforming the industry’s gain of 33%. The stock has a market cap of $202.46 billion.
What’s Behind the Rally?
Intel is the global leader in the microprocessors market in terms of market share and product performance. The company not only focuses on selling separate components but also on optimizing platform for specific markets, including mobile, enterprise and digital home.
The company recently announced Intel Stratix, the industry’s first field programmable gate array (FPGA) integrated with high bandwidth memory to accelerate workloads and keep pace with data explosion.
The newly added product will expand the onboard memory pool and add more bandwidth. We believe that the launch will improve scalability, reliability, power and density requirements of future HPC deployments.
Intel also announced substantial advances in its wireless product portfolio to accelerate 5G adoptions, alongside introducing Intel XMM 8000 series and Intel XMM 7660 series modems. The launch of Xeon Scalable, Core 8 chips, Myriad X and next-generation desktop processors are also key catalysts for thecompany.
The new desktop processors are expected to help Intel's gaming endeavors amid stiff competition from AMD and NVIDIA. Moreover, the launch of Core 8 is expected to boost PC market share.
Partnerships and Acquisitions
Intel has also been active on the acquisitions front. Its acquisition of Israel-based Mobileye, an autonomous vehicle technology provider, has enabled it to enter the autonomous car technology market currently dominated by NVIDIA and Qualcomm. The company’s continued investment in Internet of Things (IoT) and non-volatile memory storage, primarily targeting enterprise/data center customers, are also aiding the stock’s momentum.
Additionally, the company also partnered with Micron to develop memory technologies. This led to the production of the densest 3D NAND technology. Intel also launched Optane, its non-volatile storage (NVM) product based on 3D XPoint technology this year.
Earnings
Intel reported third-quarter 2017 non-GAAP earnings of $1.01 per share, which beat the Zacks Consensus Estimate by 21 cents. The figure surged 26.3% from the year-ago quarter and 40.3% sequentially.
The strong earnings growth was driven by better-than-expected top-line performance and operating margin expansion. Moreover, Intel Channel Alliance Program (ICAP) contributed 13 cents to quarterly earnings.
Revenues totaled$16.15 billion, up 2.4% year over year and 9.4% quarter over quarter. The figure beat the Zacks Consensus Estimate of $15.71 billion. After adjusting for the McAfee (formerly Intel Security Group) transaction, revenues grew 6%.
Intel Corporation Revenue (TTM)
Intel Corporation Revenue (TTM) | Intel Corporation Quote
To Conclude
Its diversified product segments form the base of Intel’s data-centric business model.We believe that growing demand for server chips that are used in data centers from cloud-based service providers like Amazon.com, Alphabet and Microsoft is a key catalyst for Intel.
Moreover, from a valuation perspective, the stock looks very attractive as it currently trades significantly lower than the industry average based on a forward earnings estimate. This signifies huge upward potential. Intel currently trades at a forward P/E of 14.47x as against the industry group average of 23.30x.
Intel has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in the trailing four quarters, delivering a positive average earnings surprise of 9.75%.
Zacks Rank & Key Picks
Intel sports a Zacks Rank #1 (Strong Buy).
Some of the top-ranked stocks in the broader technology sector include NetApp, Inc (NTAP - Free Report) , NVIDIA Corp. (NVDA - Free Report) and Western Digital Corp. (WDC - Free Report) , all sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
NetApp, NVIDIA and Western Digital have long-term expected EPS growth rate of 11.34%, 10.25% and 31.12%, respectively.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades from value to momentum from stocks under $10 to ETF and option moves from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even lookinside exclusive portfolios that are normally closed to new investors.
Click here for Zacks' private trades >>