If it weren't already obvious that Intel (NASDAQ:INTC) is moving deeper into the data center, now we have it in black and white. The rickety PC market is not a strategic focus anymore, but heavy-duty number crunching is.
The strategic shift was stated in plain English this week, baked into an announcement that longtime vice president Aicha Evans will be shouldering the newly created title of Intel's chief strategy officer.
From the announcement, with the key portion highlighted in italics:
"She will be responsible for driving Intel's long-term strategy to transform from a PC-centric company to a data-centric company, as well as leading rapid decision making and companywide execution of the strategy."
There you have it. Evans is tasked with moving Intel away from the floundering PC market and into the vibrant data analysis sector. The shift is companywide and needs to be done quickly.
The plainspoken statement comes just weeks after Intel started launching its $15.3 billion acquisition of automotive computing specialist Mobileye (NYSE: MBLY). In August of 2016, the company picked up data processing specialist Nervana, which designs hyper-specialized chips for artificial intelligence, data analysis, and deep-learning systems. Those are just two of the most high-profile moves Intel has made toward the data center market lately. The full list is much longer.
Intel rivals NVIDIA (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) are exploring the same strategic direction from their own unique angles, unlocking a ton of shareholder value in the process. NVIDIA shares have tripled over the last year as the company's latest generation of graphics processors was embraced by big-iron system builders and moved into the data center. AMD's equally fresh graphics platform is taking the same tack, yielding a nearly 400% shareholder return in 52 weeks.
The data center is at the heart of Intel's traditional hunting grounds, and the company won't stand for smaller rivals stepping in to steal all of the thunder. The Nervana buyout is a direct attack on NVIDIA and AMD, and Aicha Evans will make sure to drive that point home.
We Intel shareholders can't expect the stock to double or triple overnight, of course. It's an industry giant, poised to strike at much smaller challengers. It takes more work to move Intel's larger business needle.
But the writing is on the wall: Intel is going there with a focused purpose and high speed.
AMD and NVIDIA must have seen this coming from miles away, but their investors should still be shaking in their boots.