The past few years haven’t been easy ones for Intel Corporation (NASDAQ:INTC) shareholders. That’s not to say the Intel stock price has been a complete disappointment — INTC is up 188% from its early 2009 low. Rather, Intel has been a bit of a disappointment because the once-great company largely missed out on the advent of smartphones and mobile devices.
Nvidia Corporation (NASDAQ:NVDA), Qualcomm, Inc. (NASDAQ:QCOM) and a handful of other names have won that race thus far.
For those owners of Intel stock who’ve been frustrated by how competitive the chipmaker hasn’t been of late though, fear not. The company is positioning to be much more competitive for the next few years than it has been for the past few years.
Intel Stock Getting Back in the Game
Broadly speaking, Intel just never had a product that filled the need when mobile technologies started to replace desktops and laptops.
Chief among those needs is low power consumption. When an infinite supply of electricity is available through a wall outlet as it is for desktop computers, such efficiency is irrelevant. It’s mostly irrelevant for laptops and notebooks (though is increasingly a factor). For mobile phones and devices, though, where battery life is a huge consideration, power consumption can be a deal-breaker.
A close-second factor where Intel also largely missed the boat is condensing the size of its chipsets and thereby reducing the required size of motherboards that use them.
To be fair, Intel did have entries in this race. The Atom X mobile chipset is one of them. Neither it nor any of its other efforts to gain a real foothold in the mobile market were big hits though.
It’s not as if Intel has just been sitting back, unaware, however.
Admittedly, it will require patience of Intel stock owners who are waiting to return to its glory days. The company’s got three ideas in the hopper, though, that may well be worth the wait.
1. Light-Based Data Center Processors
If there’s one thing that was confirmed with last quarter’s results, it’s that data centers — server technologies — are becoming a very big deal for Intel. Specifically, its enterprise arm now accounts for half of the technology giant’s revenue, and its data center division saw 10% growth in third-quarter year-over-year revenue.
And the company hasn’t even put the pedal to the metal yet. Recently it announced that it had successfully developed a chip that utilizes photonics … light rays or lasers, essentially. Not only would such a technology be quite power efficient, it would be stunningly fast.
Intel says the total addressable market for its silicon photonics technology is on the order of $5 billion.
2. Making Virtual Reality Interesting
In the past, yours truly here has questioned the actual usefulness of, and interest in, virtual reality and augmented reality. As was the case with GoPro Inc (NASDAQ:GPRO), just because everyone agree the technology is cool doesn’t mean everybody wants to buy it.
This reporter is coming around on the idea of mass market virtual reality though, and sees Intel’s recent entry in that race as a huge opportunity for the company.
Earlier this month, Intel acquired sports-oriented virtual reality startup Voke after bringing another VR name into the fold a few months ago, called Replay Technologies. The combination of all these technologies will allow a viewer to look at, and replay, a sporting event from any angle, vantage point and distance. A fan can virtually, literally put himself in the middle of the game.
The virtual reality market is supposed to be worth $150 billion by 2020.
3. Near-Term Motherboard Upgrades
Last but not least, while a better virtual reality product and light-based processors are potential game-changers, they’re longer-term prospects. What about something in the meantime that might boost the value of Intel stock?
The company’s got something just around the corner too.
The buzz is, Intel will soon be debuting a chipset that allows for the integration of WiFi hardware and USB 3.1 hardware directly on motherboards, rather than requiring those two technologies to added as a separate, stand-alone chip. Not only will this simplify and lower the cost of the construction of a computer, it should also help make it more power-efficient.
This leap forward is projected to launch in late 2017.
Bottom Line for Intel Stock
Again, none of this is to suggest the Intel stock price has been a letdown. Like most other stocks, INTC stock has made gains since the economy came out of a recession in 2009.
Intel hasn’t been all it could have been though, or perhaps it might be more accurate to say Intel hasn’t been all the market hoped it might be in the shadow of the explosion of mobile technology.
It’s still not an outright terror on that front again, but the things Intel has in the hopper do make INTC stock worth a closer look from investors that had shelved it.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
