By Carly Forster
Intel was named top stock pick by Bank of America analyst Vivek Arya, who reiterated a Buy rating with a $43 price target on December 19th. Arya’s Buy rating comes amidst Intel’s announcement to provide chips in the new 4G Levono smartphone and plans for a new platform to accelerate innovation in the Internet of Things space.
Intel, mostly known for its Personal Computers, has been struggling to break into the smartphone chip market for the past several years. The company has now been given a chance to shine in the mobile market after being selected by Chinese electronics giant, Levono, to handle two key functions in a mid-range smartphone that will be sold in the company’s online store.
Seth Klarman: Investing Is Art First, Craft Second And Science Third
The two functions Intel will provide are a processor for calculating chores and a separate Intel cellular modem chip based on LTE-Advanced technology.
In addition, just last week Intel launched a new platform and related software to assist developers in gaining momentum with innovation in the Internet-of-Things (IoT) space. The platform is directed at IoT devices from industrial machinery to smart headphones to medical equipment, including wearables.
Arya has continued “to like Intel on a stabilizing PC market, underappreciated growth in data center/internet-of-things, and a gradual reduction in losses in mobile.” However, the analyst cited some potential downsides, noting “1) Weaker than expected trends in mature PC market, which is largest revenue generator for Intel, 2) Competition from ARM and other architectures in profitable data center market, 3) Inability to drive profitable growth in new mobile and foundry markets, 4) Increasing cost and complexity of semiconductor manufacturing that pressures capex and gross margins, and 5) Semiconductor and macro cycle risks.”
Arya has rated Intel 10 times in the past year, earning an 89% success rate recommending the stock.
The analyst has a history of rating stocks in the technology sector, such as Advanced Micro Devices and Nvidia, helping him earn an overall success rate of 66% and a +14.2% average return per recommendation.
Arya last rated Advanced Micro Devices on July 18th of this year when he downgraded shares of the company from Neutral to Underperform. Since then, the stock has gone down from $3.83 a share to $2.57 a share. In total, Arya has rated Advanced Micro Devices 5 times in the last year, earning a 67% success rate recommending the stock.
Separately on June 19th of this year, Arya downgraded his rating for Nvidia from Neutral to Underperform. Since then, the stock’s price has gone up from $18.97 to $20.42. The analyst has rated Nvidia 3 times in the past year with 0% success.
Intel’s entrance into the mobile market is creating a lot of positive buzz for the company, with Arya remaining Bullish on the stock. Do you trust his latest recommendation based on his financial advice history?
To see more recommendations from Vivek Arya, visit TipRanks today!
Carly Forster writes about stock market news. She can be reached at Carly@tipranks.com