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Intel (INTC) Likely to Divest Connected Home Division

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Intel (INTC - Free Report) is reportedly looking for buyers for its connected home division — a unit engaged in manufacturing chips used in home internet access gear that enable wireless connection.

The connected home unit accounts for annual revenues of nearly $450 million. It is part of the company’s Internet of Things group that registered sales of $1 billion in third-quarter 2019, up nearly 9% year on year.

According to a Bloomberg report, Intel has appointed a financial advisor to assist in the process of selling the unit.

Intel’s CEO, Bob Swan, stated that the company is exploring strategic options for areas that have been less competitive. Markedly, in July, Intel had sold its smartphone modem business to Apple (AAPL - Free Report) for nearly $1 billion. Swan also pointed out that the company’s memory business has been sluggish, and might consider seeking a partner for the same.  

Competitors of Intel’s connected home business include Broadcom (AVGO - Free Report) and Qualcomm (QCOM - Free Report) .

Focus on Other Prospective Business Areas

Intel’s latest move to sell connected home business highlights its intention to move away from less lucrative areas and focus on other prospective business areas like the Data Center Group (DCG). In fact, the company is committed toward exploring opportunities for its cloud and comms division, which is a part of DCG.

Meanwhile, the company’s investments in field programmable gate array (FPGA) to reduce latency and increase speeds are helping it develop custom solutions for big players. Also, the inclusion of Altera and eASIC is aiding the company to fortify its position in the networking space. Furthermore, Intel is making investments to expand prospects in non-volatile memory business.

Intel Corporation Price, Consensus and EPS Surprise

To boost presence in the supercomputing market, Intel is also leaving no stone unturned. The company recently unveiled its latest GPUs (dubbed Ponte Vecchio) powered by Xe architecture. The GPUs are aimed at accelerating complex HPC (high-performance computing) and AI workloads. Such efforts along with enterprise upgrades and new products are likely to consistently aid the company in maintaining its leading presence in the semiconductor product arena.

Moreover, improving trend in PC shipments favors the company’s business prospects. Notably, Intel’s PC-centric business — Client Computing Group (CCG) — accounted for as much as 50.6% of revenues in third-quarter 2019.

Zacks Rank

Currently, Intel carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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