When looking at its peers such as Qualcomm
The Quarter That Was
For the quarter, Intel generated net income of $2.83 billion, or 54 cents per share, on revenues of $13.5 billion -- topping analysts' EPS expectations while meeting its sales forecasts. What I found to be interesting was that the company said that PC shipments arrived at 87.5 million units for the quarter -- representing a 0.1% decline from the previous year.
What was also derived from the report was the company's sequential revenue growth, which arrived at 5%, while its PC revenue rose at a respectable 4%. So essentially, the rumored death of the PC has not arrived as drastically as previously anticipated. Intel is an excellent indicator of PC growth because not only are 80% of the world's PCs using its chips, but its biggest customers are the top two PC manufactures in the world, Hewlett-Packard
So should this inspire some optimism for investors of the latter two companies? Perhaps, but it does not remove the impact of the growing tablet and mobile devices market -- which is now dominated by Apple
Even more remarkable was that the company showed no meaningful slowdown due to the economic challenges in Europe whereas rival Advanced Micro Devices (AMD)
As great as the quarter was, it didn't appear to add much life to the stock. So now the question is, to what extent can Microsoft's
Whether these expectations come to fruition is not the story. The issue continues to be how to fairly assess the company's current state and where it is likely heading. It does not appear as if the market is expecting a whole lot from Intel and instead has turned its attention to the aforementioned new chips on the block -- namely ARM Holdings, Qualcomm and Nvidia.
What Intel needs is more time -- which seems to be the prevailing theme for once high fliers who are still valuable but have been unable to provide Wall Street with the growth that it craves. I think Intel will eventually re-capture its magic and prove that is can continue to increase its margins and outperform its rivals.
From an investment perspective, the stock is trading under its fair market value, which I have estimated to be right around $32. For value investors with patience, the stock should be considered a buy at these levels.