Intel Corporation (INTC)’s Multi-Year Growth Spurt Is Just Up Ahead

The datacenter continues to be interesting throughout 2014
One bright spot for Intel has been its datacenter group. This division continues to execute nearly flawlessly as it continues to gain market share across the board. Further, while Intel Corporation (NASDAQ:INTC) was late to the mobile game, it was actually early to counter the ARM micro-server threat. In fact, the company just launched its “Avoton” and “Rangeley” processors based on the “Silvermont” low power processor core in a complete, low power system-on-chip.

I believe that the underlying secular growth in the datacenter continues, but more importantly, I believe that Intel will maintain share in its traditional areas while expanding into new ones such as cold storage, networking, and communications infrastructure. Intel’s roadmap looks good, and it has many key technological and business advantages to effectively fend off threats from the numerous ARM-based upstarts.

The PC makes this tricky
The only tricky part of this thesis is the continued decline of the PC. While Intel’s participation in tablets and smartphones is a major positive that should help drive revenue growth, these effects could be significantly muted by declines in the PC space. Keep in mind that this business is still worth about $34 billion in annual sales and as long as it keeps falling, Intel’s top line story will be quite muted.

My guess is that in 2014, the end of Windows XP support should help to drive an enterprise refresh cycle. More broadly, I’m hoping that as Intel’s “Haswell” ramps, and as “Bay Trail-M” (a low power, Atom based PC chip for fan-less laptops) enters the market, improved battery life, form factor, and price points could help reignite PC volume growth. All told, I’m looking for Intel’s 2014 PC sales to be within 5% of 2013’s numbers (so nothing ultra-bearish or bullish).

The Foolish bottom line
With a near 4% dividend yield and on the cusp of a whole slew of new products that have been many years in the making, Intel Corporation (NASDAQ:INTC) looks very attractive today. If I’m right, Intel should benefit from a multi-year growth spurt beginning in 2014 and extending out for as long as servers, tablets, and smartphones continue to grow.

The article Intel’s Multi-Year Growth Spurt Is Just Up Ahead originally appeared on Fool.com and is written by Ashraf Eassa.

Ashraf Eassa owns shares of Intel. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel.

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