Intel (INTC) pushed out its earnings report by a week, as did AMD. Results are likely mixed for Intel: desktop sales in the consumer space fell or were flat, while enterprise server sales grew. Sales and profit margins should meet or exceeded expectations, thanks to PC sales growing on the graphics chip refresh from Nvidia and AMD. Looking beyond the quarterly report set for January 26, the latest chip release, Kaby Lake, is underwhelming and hardly a catalyst for lifting sales. Intel is comparing the chip’s performance to those released some 4 -5 years ago.
AMD is a wild card for Intel. If Ryzen does what CEO Lisa Su says it can do, Intel will face real competition. Intel has time and money to stay competitive. Its first step requires cutting prices to squeeze out AMD.
AMD is small and is hardly nimble. It must carefully price Ryzen and capture as much market share, with limited marketing spend.
In the mobile space, Intel revealed its 5G modem on January 4 at CES 2017. This will pit the company in direct competition with Qualcomm (QCOM). The winner will define the new standard in 5G. Intel may announce that it is working with or partnering with AT&T with this initiative. Built on the 14nm process, the modem will not need Samsung’s manufacturing.
Ahead of the earnings report, analysts have a target price of between $38 and $45 on Intel’s stock.
