Why Intel is a Solid Stock for the Next 10 Years
We have evolved from barter trade to a money economy. Therefore the more you have, the better your chances of getting what you want; after all, they say everything has a price. While waking up every day to hit the traffic and arrive in time for your 9-5 work shift will bring home the bacon, what about when you want to live your life in retirement comfortably? A paycheck by then will not cut it, and you will have to mice your pension to ensure it takes you through the remaining years of your life. Who wants to live like a pauper when you can have it all? Investing has its risks, but the rewards for timely investments are worth it, and you will be basking in the glory that your returns will afford you. However, it is not too late to make that life-changing decision today and let’s look at why Intel is a solid stock for the next ten years.
Internet of Things
The Internet of Things (IoT) has a promising future as more firms globally connect to thousands if device each day. However for IoTs to exist, they need platforms to hold it together and permit users to take advantage of the full disruptive potential of connected devices. While the mobile business has been taken advantage of by its rivals, Intel still has an ace up its sleeve with the IoT business. The IoT market is projected to hit $1.7 trillion by 2020 and Intel has been making a profit through this unit.
In the fiscal year 2014, Intel’s operating income grew by 12% to reach $616 million while the IoT revenue rose by 19% to $2.1 billion, to account for 4% of the company’s revenue and operating income. Although in the first quarter of 2017 Intel reported revenue of $721 million for the IoT business unit, the decline has been due to firms putting a hold in their technology budgets. Despite the decrease in revenue, the unit has continued to be a major contributor to the total income; in 2016, it accounted for 4.4%, and in 2017, it had shot up to 4.8%. In the next ten years, this percentage will increase as the demand for wearable and ended devices roses, much to the delight of investors.
One thing that Intel has that puts it ahead of its competitors is its data center. Intel controls a significant part of the market for data services and as firms like Amazon, Google, and Facebook continue to expand so does their need for big data centers making Intel the go-to solution for such needs.
Inference chips might be the next big thing in computing and Intel is rushing to get a slice of this pie before it misses out like it did in mobile business. So far, Amazon and Alibaba have also taken an interest in inference chips, and Intel announced Nervana, a Neural Network Processor, at the Consumer Electronics Show this year. It fits into a GPU-like form factor, and according to reports, the neural processor can deliver up to ten times the training performance of GPUs. The processor also comes with Flexpoint, a feature that enables multiple chips to act like one big chip to accommodate larger models.
Intel has still lagged on this one since Nvidia has shifted successfully from being a gaming and graphics company to an Artificial intelligence firm, with a market share of +0.86%. However, Intel is a few steps behind with a +0.41% but is accelerating its AI developments. Since Nvidia hit the market first, Intel has to come up with an equivalent or better chip; therefore it is not taking chances. Consequently, it purchased Nervana and Movidius and hired Jim Keller and Raja Koduri to create discrete graphics technology.
If successful, these neural processors will facilitate autonomous driving, face and speech recognition which we all agree could revolutionize the technology industry.
Intel made a huge blunder when it declined the opportunity to create a processor for the iPhone with the miscalculation that Apple would not sell enough of the phones to justify the development costs. Little did it know that the PC-era was coming to an end and it would have to lay off 11% of its workers to meet with the struggle of keeping up with the changing trends. However, Intel has been in the industry long enough not to make one poor decision determine its destiny, and it has taken reins in different units to ensure that no other opportunity passes without taking advantage of it. With the above strategies, Intel’s stock will be worth much more in the next decade to come.
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