Watch stocks you care about
Your own personalized stock watchlist!
It's a 100% FREE Motley Fool service...
Investing decisions are made from a mosaic of data, yet synthesizing what matters can be tough. Enter the Fool poll. We show you the Big Headlines, and you tell us what's factoring into your investing decisions and help your fellow Fools in the process.
One of the great truths of trading is that analysts can hurt you over the short term. Just ask anyone who owns shares of Intel (Nasdaq: INTC ) . The stock had been off as much as 3.5% on an up market day, thanks to a Nomura Securities downgrade.
Analyst Romit Shah has good reasons for liking Intel less today. The chipmaker reduced its forecast for full-year PC shipment growth -- from the low double digits to 8%-10% -- and authorized $300 million in new capital spending. Less demand, more cost. Not good, right?
No, but the story also isn't that simple. Intel CEO Paul Otellini said in a Bloomberg interview that reduced PC demand wouldn't dampen revenue growth since the hit would come at the lowest end of the market, where Intel's Atom chip competes with low-power designs from ARM Holdings (Nasdaq: ARMH ) and MIPS Technologies (Nasdaq: MIPS ) .
Diversification is key to Intel's stock story, as Otellini tells it. During yesterday's call with analysts, he pointed to a 38% increase in microprocessors for storage devices and a 40% increase in revenue from data-networking customers. Data-center clients are also increasingly relying on Intel-powered servers, Otellini told Bloomberg.
But don't tell that to traders. To them, Intel and Microsoft (Nasdaq: MSFT ) are the PC business. And if the PC business is slowly giving way to tablets, smartphones, and single-purpose cloud laptops such as Google's (Nasdaq: GOOG ) Chromebook, "Wintel" will pay a dear price. Otellini would say otherwise, but I want to know what you think.
Will you buy Intel shares today? Please vote in the poll below, and then leave a comment to tell us whether you think Nomura's assessment of Intel is fair. You can also add Intel to your watchlist for up-to-date analysis on the stock as soon as it's published.