The Internet of Things (IoT). If there’s one idea that’s revolutionizing the way we work, live and play in the the early 21st Century, then it’s IoT, and Intel Corporation (INTC) is one of the prime movers in the tech industry. Although, to be fair, IoT isn’t so much an industry as it is a way of existing on the planet.
What’s more, Intel didn’t even enter this space in earnest until about a year ago, but INTC has been moving quickly and navigating the space well since its entrance. Part of that has to do with the Intel’s new CEO, Brian Krzanich. As the former COO and 30-year veteran of the company, Krzanich had seen a lot before stepping into the big office in mid-2013.
Many were concerned that Intel had lost its way and had missed major commercial opportunities, particularly its focus on personal computers when mobile computing had become the real growth sector in the computing business. Many thought Intel was doomed since retooling such a massive company and trying to get competitive in a space that it had all but ignored.
Krzanich was brought in to get Intel back in the game. And while many were happy that the board saw need for a change and hired a smart guy who knew every corner of the company, most wished him well but stayed a bit skeptical.
Well, Intel stock is up almost 50% in the past year.
But it wasn’t that Intel went big into the mobile space; it takes years to break into that market since the devices have been designed years ahead of time, and the infrastructure isn’t such that you can just swap out chips for the next gen hardware.
No, Intel took a much more interesting step to thrive in coming decades. INTC dove into IoT.
What Is The Internet of Things?
The Internet of Things is made up of billions of ‘smart’ devices — from machines the size of a grain of sand to huge machines — that use wireless technology to talk to one another and to us. Fundamentally, IoT is bigger than mobile; it’s bigger than the Internet. It’s the next wave.
For example, in the mobile space. You know the apps that help you get from point A to B? Tell you how much you’ve walked or run or eaten today? Or the alarm that goes off in your car when your tire pressure is low? That’s IoT.
But it’s not limited to consumer tech. IoT also spans the healthcare space, defense, homeland security, manufacturing, retail… you name it. Last year, at the gigantic Consumer Electronics Show (CES) in Las Vegas, Intel showed off its ‘wearables’ concepts. Wearables are smart clothing, clothes that measure physical metrics and communicate it to the wearer or a doctor. Say your core temperature is getting too high — a smart shirt might allow for great breathability to vent some of the heat away from your skin.
At this point, estimates are there will 200 billion devices connected to the IoT by 2020 and becoming a $6.2 trillion business by 2025. Yes, trillion.
Although there are some competitors out there, no one has the kind of breadth and depth of Intel.
Intel – Still A Quality Company, Quality Stock
Intel has undoubtedly found its footing in the dynamic tech marketplace, and it’s no surprise INTC stock an A-rated Portfolio Grader pick.
Chipmakers exist (or perish) in a commoditized environment. By moving its business into a higher margin business like IoT, Intel is able to provide a nice boost to its top line and bottom line for the long term.
Intel stock’s 2.8% dividend yield is another nice bonus to the reinvigorated growth prospects Intel provides. The fact that Intel has made a large commitment to such a high-potential sector and built a strong strategic position in the space in such a short amount of time demonstrates that Intel is still agile and visionary. That’s a very bullish sign indeed.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
