Back to top

Image: Bigstock

Intel's Data Center Focus Limits Apple's Mac Chip Plan Impact

Read MoreHide Full Article

Intel  (INTC - Free Report) shares declined 6%, closing at $48.92 on Apr 2 following a Bloomberg report, which stated that Apple (AAPL - Free Report) is planning to replace the semiconductor giant’s chips used in Mac computers by its own from 2020.

Despite the plunge in shares, we believe Apple move will have limited impact on Intel. This is because the iPhone-maker is currently not a major player in the traditional PC market.

Per IDC report, Apple accounted for only 7.3% in “traditional PC unit market share” in the fourth quarter of fiscal 2017.

Data Center, Self-Driving Car: Key Catalysts

Intel’s focus on data center, cloud, self-driving car and Internet of Things (IoT) are key growth drivers. The company has made significant advancements in this area as well and it is now offering more integrated solutions that will likely be competitive on a cost per watt basis.

Intel’s investments in field programmable gate array (FPGA) for acceleration (dramatically increases performances at very low power) and memory to reduce latency and increase speeds are helping it develop custom solutions for big players.

Moreover, Intel’s acquisition of MobilEye now enables it to offer almost anything related to self-driving vehicles — cameras, in-car networking, sensor-chips, roadway mapping, cloud software, machine learning and data management.


The buyout will aid the company rapidly penetrate the autonomous car technology market, currently dominated by the likes of NVIDIA (NVDA - Free Report) and Qualcomm.

Moreover, in August 2017, the chip-maker announced plans to build 100 “level 4” vehicles to test its self-driving technology. Intel has also announced “level 5” autonomous driving platform based on EyeQ5 and Atom, which will sample over the next few months.

Additionally, the company has also been a long-time supplier to Alphabet’s (GOOGL - Free Report) Waymo division. Further, its partnerships with BMW, Nissan, Volkswagen AG, and Ferrari will boost sales of processing chips, sensor-chips, cloud software and many more, which will drive top-line growth.

Intel has become a notable player in the Internet of Things (IoT) market post the Altera acquisition.

Zacks Rank

Intel carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Intel Corporation (INTC) - free report >>

Apple Inc. (AAPL) - free report >>

NVIDIA Corporation (NVDA) - free report >>

Alphabet Inc. (GOOGL) - free report >>

Published in