Intel Corporation (NASDAQ:INTC) is seeing improvements in the enterprise segment for both PCs and servers, according to analysts at Barclays. In addition, they report that the chip maker is making a “strong push” into the mobile market through both smartphones and tablets. Analyst Blayne Curtis and the rest of the team at Barclays say they’re encouraged by these indications, so they have raised their price target.
They kept their Equal-weight rating on the stock, however, saying that they still have long-term concerns about the life of the PC market.
Qualivian Investment Partners Up 30% YTD; Long ORLY Thesis
Qualivian Investment Partners commentary for the second quarter ended July 30, 2020. Q2 2020 hedge fund letters, conferences and more “Short-term investors will accept a 20% gain because they didn’t spend the time to develop the conviction and foresight to see the next 500%.” - Ian Cassell Executive Summary Readers of investment letters fall into Read More
Intel sees improvement in enterprise
The Barclays team said they went on a road trip with Intel Corporation (NASDAQ:INTC) recently. They saw tailwinds from several areas, including the end of the Windows XP life cycle, growth in the gross domestic product and new technologies, including virtual storage and SDN.
In particular, Intel is seeing benefits from the end of Windows XP, which the analysts expect to provide a tailwind for the enterprise PC market through next year. Intel has also seen a “steady ramp in vPRO sales” thanks to the end of the operating system’s life cycle. Unfortunately though, they aren’t seeing the “sharp rise (and subsequent decline) many were hoping for.
The analysts are also expecting to see strong growth in Intel’s servers division as cloud, HPC and Telco remain strong.
Intel pushes into mobile
One of the reasons the PC market has been declining so rapidly is the shift toward mobile devices. The Barclays team reports that Intel Corporation (NASDAQ:INTC) has set “an aggressive goal” to nearly quadruple its tablet volume during 2014. They said in the near term, this creates a drag of about 150 basis points on gross margins. However, Intel management believes that this is necessary in order to set the company up as a “meaningful x86 presence” within the tablet market.
In handsets, Intel is narrowing its focus a bit to the top-tier manufacturers. The company also said it has created a product road map to target both the high and low ends of the handset market. The Barclays analysts believe that Intel Corporation (NASDAQ:INTC)’s deep pockets and leadership in manufacturing could outlast some of the company’s competitors. However, they say there’s “significant execution” needed in order for Intel to survive.
Barclays analysts increased their target price for Intel from $20 to $22 per share.