Many investors erroneously associate Intel with being a pure-play chip company with exposure to the slow-growing PC business. While this may have been true 20 years ago, the Intel of today has direct exposure to mega growth categories. Most notably these include the cloud, building the platform that will hold the future of communication, ensuring self-driving cars can operate safely, among other innovative solutions. Here is a look at the latest Intel stock news for 2020.
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A few weeks later in early March, Intel double-downed on its 5G focus through a new collaboration with Nokia related to silicon technology innovations for 5G New Radio and cloud infrastructure.
“Through our collaboration with Nokia, our broad portfolio of products and ASIC capabilities, we are showing the value that can be realised with a consistent, high-performance architecture across the intelligent 5G network,” Intel VP and general manager of the Network Platforms Group commented in the press release.
Looking towards the future part 2: autonomous driving and more
Intel acquired Mobileye for $15.3bn in 2017 to build on its autonomous driving platform with an eye on dominating a $70bn market by 2030. The rationale behind the deal was to combine Mobileye’s computer vision expertise with Intel’s computing power and connectivity expertise to create what it called an “automated driving solutions from cloud to car.”
True to its long-term mission and eye on dominating a large market, Intel announced in early May the acquisition of Moovit, a mobility-as-a-service solutions company for $900m.
Moovit is a trip planning platform that combines public transportation, bicycle/scooter services, ride-hailing, and car-sharing. According to Intel’s press release, the combination of Moovit will help its acquired Mobileye unit become a complete mobility provider. This would increase the total addressable market Mobileye can capture from $70bn to $160bn by 2030.
While it is too early to predict any 2030 INTC share price forecast, it would be reasonable to assume Intel is on track to dominate a market that is only accessible to the biggest and best tech companies. Thankfully, management is making prudent investments today to create a favourable Intel stock trend over the coming years.
What else is Intel focusing on?
Intel continues to diversify its business today to see if it can gain exposure to different lucrative markets over the years to come. Most recently, Intel’s global investment arm called Intel Capital said it invested $132m across 11 different start-ups.
The investments give Intel new access to intellectual property and expertise across artificial intelligence, autonomous computing and chip design. The round of investments puts Intel on track to achieve its prior goal of investing up to $500m in new technology companies in 2020.
Another area of interest Intel is looking to expand into is the massive health care market. Intel believes its artificial intelligence technology can be used to better help medical professionals identify tumours. Specifically, Intel’s software and hardware shows “great promise” in early detection but requires “more data than any single medical centre holds”.
While Intel didn’t specify any financial goals or objectives for its health care initiatives, it goes without saying that a potential life-saving platform can support a bullish INTC stock price prediction.
Intel share price forecast 2020: depends on broader market
Important to keep in mind for any Intel stock forecast 2020 is broader Covid-19 concerns which continue to plague the markets. Intel stock analysis shows a five-year monthly beta of 0.82 which implies shares are approximately 20 per cent less volatile than the broader market.
According to TipRanks’ latest Intel stock price forecast, based on 28 analysts offering year-long price targets, the average price target for INTC is $62,44, which represents a 6.94 per cent increase from the last price of $58.39 and is 10.9 per cent lower from its 52-week high of $69.29.
The highest analysts’ price target for the next 12 months is $85.00, while the lowest expected price is $45.00. Analysts review the Intel stock as a moderate buy.
Investors should still expect Intel’s stock to closely follow the broader index in the same direction. If Covid-19 concerns continue to plague the NASDAQ 100 index, through no fault of its own, Intel’s stock would be unfairly punished. But this could create a compelling long-term opportunity for investors willing to accept near-term volatility to invest in a company with a clear vision and focus for the long-term.
Don’t forget that with contracts for difference, it does not matter whether your view of the Intel share price forecast 2020 is positive or negative. You can always try to profit from any future price fluctuations, regardless of their direction by taking a long or a short position respectively. Follow the latest stock market news and track the INTC live rates with Capital.com.
Q1 report signals diversified tech giant
The most notable Intel share price news to date in 2020 is the company’s first quarter report in late April. Investors unfamiliar with the composition of Intel’s business are urged to better examine Q1 results as it answers in the affirmative if Intel shares buy or sell.
Intel reported first quarter revenue growth of 23 per cent year-over-year at $19.8bn. By segment, the PC-centric business grew at a respectable 14 per cent year-over-year but the data-centric business expanded 34 per cent year-over-year.
The data-centric business includes the Data Center Group (DCG), Internet of Things Group (IOTG), Mobileye, Non-Volatile Memory Solutions Group (NSG), Programmable Solutions Group (PSG), and all “other” units.
Intel’s stock fell following the report as investors had some concern with management’s outlook. But why is Intel stock going up for 2020 and beyond is clear: the company’s investments to diversify away from PCs to cutting edge and next-generation technology is clearly paying off today.
In fact, Intel noted its EPS for the first quarter rose 56 cents or 63 per cent year-over-year to $1.45. Approximately 62 per cent of the EPS lift is attributed to the transformation to a data-centric company. Encouragingly, the fast-growing unit also comes with an attractive profit profile which certainly bodes well for Intel stock outlook.
Specifically, operating income for the Data-centric business nearly doubled from $1.8bn last year to $3.5bn while the operating margin expanded from 38 to 50 per cent.
Looking towards the future part 1: 5G
Intel detailed in late February its playbook to dominate the lucrative and large 5G telecom market that will be around for decades to come. Intel’s Navin Shenoy, EVP and general manager of the Data Platforms Group, said in a press release that the network infrastructure portion of 5G alone represents a $25bn opportunity by 2023.
Any Intel stock predictions should be based on a favourable view of the company’s line-up of products and services to achieve its goals. Some of the new products announced in the press release include the new Intel Atom P5900, a 10nm system-on-a-chip for wireless base stations, a new second-generation Intel Xeon Scalable processor to protect the integrity of the data and the platform with enhanced security features.