Will Intel's New Chip Impress Investors?

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

As PC sales continue to decline, Intel's (Nasdaq: INTC  ) shift to new markets, including the cloud and mobile computing, isn't just a good idea -- it's a must. It's also making strides in its efforts to make news in the tablet, server, and enterprise markets.

A sticking point, not only for Intel but for the cloud, enterprise, and mobile industries in general, is developing a chip that has the power to run infrastructures as large as Facebook's (Nasdaq: FB  ) , for example, without using obscene amounts of energy. To that end, Intel would like to introduce you to its Atom processor S1200 family of processors.

Kudos, from all the right people
If yesterday's announcement is any indication, Intel's new set of chips has the backing of some of the leading IT players in the industry. Though Frank Frankovsky, VP of hardware design for Facebook, wasn't committing to any Intel chip purchases yesterday, he did make it clear that with 4 .5 billion updates daily, Facebook needs a reliable, efficient, and cost-effective processor. However, the fact that Frankovsky joined Intel VP of Datacenter and Connected Systems Diane Bryant on the San Francisco stage for the announcement speaks volumes.

Along with Facebook, executives from Hewlett-Packard and Microsoft were also on hand to lend support to Intel's new server and cloud computing solution. Also on board with Intel's latest efforts is James Hamilton, chief technology officer of cloud innovator's (Nasdaq: AMZN  ) Web Services. In yesterday's blog, Hamilton gives glowing praise for Intel's S1200 line of processors , saying, "I'm excited by the S1200 announcement because it's both a good price/performer and power/performer and shows that Intel is serious about the microserver market."

So what?
Hamilton's remark that the S1200 chips "show that Intel is serious..." says it all. Thing is, that's exactly what Intel has been trying to make clear to investors for months now, along with getting serious about dominating the mobile computing chip market. As I alluded to a week back, Intel's shift from supplying chips to PC manufacturers to emphasizing growth in explosive new markets isn't new.

Intel's market expansion objectives will mean running headlong into ARM Holdings (Nasdaq: ARMH  ) , and its own set of newly released data center chips . No easy task, as ARM already holds a strong position in both microprocessors and mobile computing.

But recent discussions involving Intel taking over Samsung's role in the manufacture of ARM chips for Apple's (Nasdaq: AAPL  ) iPhones, along with news that Intel may buy into Sharp's mobile display technologies, are two more ways Intel can quickly make a dent in ARM's market share.

For value investors, the S1200 chips may not be the one single announcement that wakes the market up to the outstanding growth and income opportunity that Intel presents, but that's all right. It gives you a bit more time to take advantage of its industry-leading 4.35% dividend yield, lowest trailing earnings ratio around, and best returns on assets, equity, and investment the IT sector has to offer.


Read/Post Comments (0) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2151527, ~/Articles/ArticleHandler.aspx, 10/25/2016 1:36:08 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,189.37 -33.66 -0.18%
S&P 500 2,145.40 -5.93 -0.28%
NASD 5,285.37 -24.46 -0.46%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/25/2016 1:20 PM
INTC $35.04 Down -0.23 -0.64%
Intel CAPS Rating: ****
AAPL $117.77 Up +0.12 +0.10%
Apple CAPS Rating: ****
AMZN $834.01 Down -4.08 -0.49% CAPS Rating: ****
ARMH $0.00 Down +0.00 +0.00%
ARM Holdings CAPS Rating: ***
FB $132.60 Down -0.68 -0.51%
Facebook CAPS Rating: ***