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Why I’m Bullish on Intel Corporation (INTC)

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Having previously dominated the PC industry, it looks like Intel Corporation (NASDAQ:INTC) is finally adapting to the Android platform in smartphones and tablets. The world’s largest chip maker has been a leading force in the market for microprocessors; however, the company has been facing some problems, mainly because of the decline in the PC industry. Intel Corporation (NASDAQ:INTC)

‘s late entry is probably one of the major factors why its two biggest competitors are currently enjoying success in the market for tablets and smartphones.Intel Corporation (NASDAQ:INTC)

 

QUALCOMM, Inc. (NASDAQ:QCOM) and NVIDIA Corporation (NASDAQ:NVDA), in this particular industry, have been around for quite some time now, and they lead the industry after partnering with some of the biggest manufacturers. Intel, on the other hand, is still new in the industry and only has a handful of smartphones and tablets. But all that is set to change with the company’s solid plan going forward.

Valuation

Intel Corporation (NASDAQ:INTC), with a market cap of over $120 billion, is currently trading around $24. After falling to nearly $19 dollars last year, Intel’s stock has been going up. The company also has a reputation in paying regular dividends. Intel Corporation (NASDAQ:INTC)’s latest earnings report was relatively solid, with respect to the decline in the PC market; Intel’s biggest business strength. The company’s quarterly revenue and shipments fell by 3% and 7%, respectively, while the PC market saw a very sharp decline of nearly 14% for the quarter.

NVIDIA Corporation (NASDAQ:NVDA) is currently trading around $14.50 and has a market cap of over $8 billion. The company’s stock has seen a sharp increase after hitting below the $11.50 mark last year. QUALCOMM, Inc. (NASDAQ:QCOM), on the other hand, is currently trading around $60.5 with a market cap of over $104 billion.

Even though Intel Corporation (NASDAQ:INTC) is optimistic about the future and has a solid plan, it is still uncertain on what the company will achieve and where it currently stands. Here is a SWOT analysis of Intel, which will give investors a better picture of where Intel currently stands.

Strengths

Possibly, the biggest strength for the company is its brand name and recognition. The company has been a leader in making chips for decades and it currently dominates the market for PC chips. One of the reasons why Intel might be able to get a decent market share in the smartphone industry, even after a late entry, is because of its brand loyalty and image.

Its current position in the PC market is another strength for the company, and even though the overall PC market is declining, Intel Corporation (NASDAQ:INTC) will continue to cash in with the business for years to come. Also, the PC market might not be dead in the future and technology, along with innovation, might take the PC industry to the next level.

The launch of Windows 8 hybrids and convertibles can be seen as another strength for the company; a place where Intel’s processors are nearly perfect. These hybrids are targeted towards a specific audience and even though this specific type of product hasn’t been that successful, the company believes that these hybrids will definitely pick up in the future, as the concept is just too big to ignore.

Aside from that, Intel’s current range  of processors is another core strength for the company. Previously, the company focused solely on performance; however, Intel has definitely stepped up its game in power efficiency as well, with its Atom processors. Also, its power efficient upcoming core processor, Broadwell

Weaknesses

Possibly, Intel’s biggest weakness is the declining PC market and even if the PC market can turn around, it will take several years before the PC market can improve again. Till the PC market dies or turns into something different, Intel will continue to face declining revenues and profits.

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