Intel (INTC - Free Report) recently introduced two new processors — Intel Atom x6000E Series and Intel Pentium and Intel Celeron N and J Series processors — that specifically have improved IoT capabilities to accelerate edge computing. These processors belong to Intel’s 11th generation core processor series, dubbed “Tiger Lake.”
Per Intel’s estimates, these two IoT-centric processors will offer 1.7x and 1.5x times improvement in single and multi-thread performance over the prior generation (Intel Pentium J4205). The company also added that these processors will find widespread used in verticals like industrial, healthcare, retail, and transportation.
Robust Features to Drive Adoption
Intel Atom x6000E Series and Intel Pentium and Intel Celeron N and J Series processors feature dual and quad-core options with CPU high frequency ranging from 1.0 GHz to 1.9 GHz. The processors have burst frequencies up to 3.0 GHz and offer support to DDR4 and LPDDR4/x memory for up to 64 GB capacity.
The new IoT processors will offer twice improved 3D graphics over the prior generation (Intel Pentium J4205) backed by the integration of Intel UHD Graphics. The UHD platform offers support for HDMI 2.0b, DP, eDP and MIPI DSI interfaces. It also supports 4K resolution on three displays simultaneously at a rate of 60 FPS (frames per second).
The processors are based on Intel Programmable Services Engine which is an offload engine designed to ramp up IoT capabilities and leverages ARM Cortex-M7 microcontroller. The engine enables out-of-band and in-band remote device management along with low-DMIPS computing and low-speed I/O (input/output) for IoT applications. It supports real-time computing as well.
The processors support Intel Time-Sensitive Networking (TSN) and Time Coordinated Computing (Intel TCC) technologies, while adhering to functional safety guidelines set by IEC 61508 and ISO 13849.
The robust features are expected to bolster adoption of the new offerings, which favors the company’s growth prospects and instills investors’ optimism in the stock. In the year-to-date period, shares of Intel have declined 18.5% against the industry’s growth of 21.4%.
Momentum in Edge Computing and IoT Augurs Well
Edge computing technology refers to the processing and storage of the data closer to the edge of a user’s network, wherein the data is generated and not across a centralized data center. This establishes better control and management of the data while reducing operational costs.
The rapid growth in edge computing is anticipated to be a tailwind for Intel’s growing focus on this vertical. Notably, accelerated deployment of 5G, migration of workloads to cloud and fast proliferation of IoT & AI is facilitating data processing at the edge. Per company estimates, edge silicon market will be a $65 billion opportunity by 2024.
Further, citing an IDC report, Intel revealed that 70% of the global organizations will be engaged in edge computing by 2023.
Per Verified Market Research data, global IoT market is anticipated to witness a CAGR of 25.7% over a forecast period of 2019 to 2026 and reach $1,319.08 billion by 2026.
Meanwhile, global edge computing market is envisioned to reach $250.6 billion by 2024 at a CAGR of 12.5% between 2019 and 2024, per an IDC report.
We believe Intel’s push into the rapidly growing IoT and edge computing market favors the company’s growth prospects in the longer haul and reinforce its competitive position against peers like Advanced Micro Devices (AMD - Free Report) .
However, NVIDIA's acquisition of ARM Holdings, might aid the acquirer to provide full stack CPU-GPU offering, which poses a headwind for Intel.
Zacks Rank and Key Picks
At present, Intel carries a Zacks Rank #3 (Hold).
Some better-ranked stocks worth considering in the broader sector are Zoom Video Communications (ZM - Free Report) and Blackbaud (BLKB - Free Report) , both currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Zoom Video and Blackbaud is pegged at 25% and 7.6%, respectively.
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