This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

This Chip Maker Could Save PC Makers

Chris Lau, KAPITALL Contributor:  The growth of mobile devices over PCs is an ongoing theme that will not likely change any time soon. Even two product refreshes in the recent past were expected by investors to reinvigorate demand for the PC. Ultrabooks were first thought to bring consumers choice and balance. When they were released, manufacturers could not offer ultrabooks at a low enough price. [More Analysis by Chris Lau:  4 Tech Stocks Cramer Favors as Markets Threaten to Sell-off]

The operating system refresh from Microsoft’s (MSFT) Windows 8 was launched late last year, along with the Surface RT tablet. Initial sales for both solutions appear to be weak.

When Intel (INTC) refreshes its lineup of chips, investors will be skeptical with its importance in stimulating PC sales. Pundits cite the ability to do actual work on a PC as a reason that the sector will remain healthy. The problem for investors is that consumers are more willing to refresh their “consumption devices” every 1-3 years, while being reluctant to upgrade their PC.

When Intel begins shipping their “Haswell” chip in June 2013, the fourth-generation core could be a non-event for the PC sector. The processor will be used to power ultrabooks and hybrid tablets. The main selling point for the refresh is a better battery life. The Intel Atom processor, once a very popular processor when netbooks had high demand, will also be refreshed. Code-named “Bay Trail,” the Atom processor will be a quad-core chip that offers double the performance.

Analysis

Mobile processor makers are highly favored by investors, while Intel is being ignored. ARM Holdings (ARMH) is valued with a Price of Profitability of 54, while Qualcomm (QCOM) is valued at a POP of 16. Intel has a POP of just 11.

Similar to previous occasions, Intel is an out of favorite chip giant that is underappreciated by the market. Microsoft failed to generate strong sales for the underpowered RT despite heavy marketing, but there is hope. When the Surface Pro was released, sales for the first month were very promising. This suggests that the market for a fully functional mobile PC exists. A Surface Pro powered by Haswell, and having a battery life of longer than a work day would appeal to consumers.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 18,034.93 +208.63 1.17%
S&P 500 2,100.40 +19.22 0.92%
NASDAQ 4,994.6020 +62.7870 1.27%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs