The 1 Storyline You Must Watch From Intel's Earnings

Tech earnings season kicked into high gear tonight, with companies worth of one-third the value of the entire technology sector reporting. One company that should have caught investors' eyes is Intel. The company managed to beat earnings estimates and also pointed toward better-than-expected demand in the year ahead.

However, as senior technology analyst Eric Bleeker notes, while investors might cheer Intel's beating earnings this quarter, the important thing to watch is the long-term storyline in emerging markets. On its call, Intel highlighted that 20% of PCs are now sold in China and that it saw a 15% growth rate in the country last year. Throw in huge growth rates in other markets like Indonesia and India, and a striking observation comes forward:

The PC might be dying in America, but it's thriving in the rest of the world.

That storyline should mean Intel outperforms software peers like Microsoft, which can't as easily profit from these markets, while other semiconductor plays with exposure in China, like AMD, NVIDIA, and Marvell, can ride the trend of surging technology demand in these emerging markets for years to come.

Foolish bottom line
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Eric Bleeker owns shares of NVIDIA. The Motley Fool owns shares of Intel, Marvell Technology Group, and Microsoft. Motley Fool newsletter services have recommended buying shares of NVIDIA, Intel, and Microsoft, writing puts in NVIDIA, and creating a bull call spread position in Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On January 20, 2012, at 4:10 PM, jdwelch62 wrote:

    It's about time you guys got the point! The PC isn't dead... But you have to have a global perspective to see that. Intel's PC Client Group's revenue grew 17% YoY, and Intel's total revenue grew 24% YoY. That's a growth company's kind of numbers. At a PE around 10, what are you waiting for? And as for the mobile market? Intel is just getting started. In case you hadn't figured it out by now, I am Long INTC...

    Fool on... :-)

  • Report this Comment On January 21, 2012, at 11:03 PM, TMFRhino wrote:

    jdwelch,

    I've been watching it for awhile... But I think I'm finally coming around to the fact that Intel will really rock its blue-chip tech peers in coming years. This emerging market trend is *the* story for 2012 even if growth in China falls off.

    Oh, and yes... Fool on :)!

    -Eric

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