Time to Put Intel Corporation (INTC) Inside Your Portfolio?

In the meantime, QUALCOMM, Inc. (NASDAQ:QCOM) and ARM Holdings haven’t been waiting for Intel to catch up as these two companies continue to allocate a higher percentage of their revenue to research and development as indicated in the chart below.

But if Intel Corporation (NASDAQ:INTC) succeeds in augmenting its market share in mobile, this could pull up its profit margin that has been falling in the past several quarters.

The chart below shows the profit margin of ARM Holdings plc (NASDAQ:ARMH), Qualcomm and Intel in the past several quarters. As seen, the operating profit margins of ARM Holdings QUALCOMM, Inc. (NASDAQ:QCOM) have been rising, while Intel’s has been falling.

In terms of revenue, Intel’s net sales declined in the first quarter of 2013 by 2.5% (year-on-year). In comparison, ARM Holdings plc (NASDAQ:ARMH)’ revenue spiked by 28.5%; Qualcomm’s revenue sharply rose by 23.9%. The high profitability and revenue growth are two factors that Intel is trying to regain by attempting to increase its smartphone market share.

Even though Intel Corporation (NASDAQ:INTC)’s profit margins and revenue have been falling, investors have slowly come back to this company. One indication for this shift in sentiment towards Intel is the recent fall in Intel’s CDS.