When Intel (NASDAQ:INTC) reported Q1/2020 earnings, shares initially dipped but then rebounded. Markets realized that the chip giant has a slew of product launches ahead in the PC space. And even though Advanced Micro Devices (NASDAQ:AMD) is trouncing the company from a technical architecture viewpoint for servers, Intel is not worried.
Intel reported Q1 revenue up 23% and EPS up 63% Y/Y. PC sales grew as stay-at-home orders across the globe drive PC and notebook sales higher. The supply chain is healthy with factories operating. Over 90% are on-time deliveries. Intel will do its part in contributing to the COVID-19 recovery by donating money to countries that need it. It is also working with Medtronic and Dyson on ventilators.
In the server space, AMD’s EPYC 2 is growing but Intel’s cloud revenue grew 50% Y/Y. Communications revenue grew 30% Y/Y. These two units are now 70% of the Datacenter business. With PCs, Intel is fulfilling client orders. Intel launched the 5G base station SoC and Snow Ridge 10nm-based chips in the last quarter and expects Tiger Lake client CPU to come in the middle of the year. The 10th generation Intel chip, code-named Comet Lake, will be the first to offer over 5GHz speed for laptops.
Intel is worth $65-$70 a share. The upside is minimal but if the stock dip, it is a buy.
