The markets are moving sluggishly to open this week of investing. The Dow Jones Industrial Average (DJINDICES: ^DJI ) is taking a breather after last week's wild up-and-down ride, and Intel (NASDAQ: INTC ) stock has taken an early lead on the index. The U.S. economy got some good news earlier in the day when ratings firm Standard & Poor's upgraded the American credit outlook from "negative" to "stable." The agency added in a warning that it expects future fiscal issues, such as the debt ceiling, to remain politically divisive in the future, which could hurt economic decision-making going forward.
Let's take a look at why investors are cheering Intel on today.
Intel embraces the future
Intel's shares have picked up 1.6% as of 2:30 p.m. EDT to lead the Dow higher, and a recent slate of good news from the company has investors thinking optimistically. The chip maker scored a huge win recently when electronics maker Samsung chose Intel to provide chips for its Galaxy Tab 3 10.1 phone -- a giant step forward for the company, whose rivals have raced past it in the mobile industry. Intel already boasts chips in a number of tablets set to arrive across the mobile sphere, and the phone market will provide the last entry point this company needs to become a major mobile player.
If Intel can solidify a deal with Samsung and firm up that relationship for the future, it will be well-placed to capitalize on one of the biggest mobile-producers on the market. It helps that Intel's newest processors have received high praise: ABI Research analysts offered strong approval of the company's latest Atom processor, saying it performs well against rival products from Qualcomm (NASDAQ: QCOM ) and others.
Considering that Qualcomm has long been one of the most dominant chip-makers in the mobile industry and is perhaps Intel's most significant competitor in the market, Intel will need to keep this outperformance up. Qualcomm won't sit and watch as its rival dazzles the mobile market. The firm's Snapdragon 600 line of chips has impressed major phone-makers such as Samsung and HTC, and Stene Agee analyst Vijay Rakesh reported to ZDNet that Qualcomm could capture up to 70% of the chip-making for Samsung's Galaxy S4s.
Intel won't be able to catch up to Qualcomm immediately, but the company is also making inroads in other areas as it pivots away from the declining PC market's. The company continues to explore developing a TV business, and Intel has made waves by offering to pay considerably more to media providers than traditional cable businesses. While Intel is expected to pay more, considering that it's still in the start-up phase and lacks viewership, a significant premium could be enticing to media developers looking for a new niche. Intel plans to launch the business later this year, but if it can't hammer out deals with enough major content-providers by that time, it'll have to push back plans until 2014.
Will it work? Intel's plans are still developing, so it's too early to say whether or not the company will succeed in competing with the likes of Google TV or Apple TV. Investors should keep an eye on the developments, however, as Intel's post-PC plans will drive the future of this company.
When it comes to dominating markets, it doesn't get much better than Intel's position in the PC microprocessor arena. However, Intel must find new avenues for growth. In this premium research report on Intel, a Motley Fool analyst runs through all of the key topics investors should understand about the chip giant. Click here now to learn more.