CEO Brian Krzanich is implementing a major reset at the company that should transform Intel from a zero-growth story as a desktop-dependent enterprise to a profit-making company that powers the cloud and smart, connected devices.
Not only will this shift help Intel get a better valuation, but it will likely position an investment made today for a 17-18% total return in a year's time. Intel shares were roughly flat in last Monday trading.
Intel has lunged forward between last month's third-quarter earnings and today.
In its third quarter, the brand pulled off 9.1% year-over-year revenue growth and 21% year-over-year net income expansion. These results are better than those of peers Qualcomm, Taiwan Semiconductor, Texas Instruments, Micron Technology, Applied Materials, and SoftBank's ARMH Holdings.
The reason: Intel is shedding its stuffy reputation, striking new partnerships and working on exciting technologies to become the chip supplier of the future.
The company's artificial intelligence (AI) strategy, enterprise cloud alliance with Alphabet, and growing investments in autonomous driving, drones and virtual reality are some of the more promising changes. Intel remains the king of the chip world, yet it's proving agile enough to venture into new areas.
The company has recently enjoyed some favorable legal news. Last month, an advisor to the Court of Justice of the European Union (ECJ) supported Intel's appeal against a record 1.06 billion euro penalty for alleged antitrust violations. EU regulators had imposed the penalty in 2009 for Intel's efforts to strangle Advanced Micro Devices.