Let’s call a spade a spade: it’s been the unexpected revival of a left-for-dead Advanced Micro Devices (NASDAQ:AMD) that’s made life miserable for Intel (NASDAQ:INTC) shareholders of late. Although Intel stock was up as much as 24% for the year as of June, another batch of new products from AMD has taken the Intel stock price from more than $57 to less than $46.
It’s not just AMD that gets the credit/blame, though. Although Apple (NASDAQ:AAPL) has long been a fan of Intel’s modems and connectivity tech for its iPhones, the buzz is that Apple won’t be tapping Intel to supply Wi-Fi and Bluetooth chips for the version of the smartphone expected to launch in 2020 after all. In the meantime, Samsung Electronics (OTCMKTS:SSNLF) has reportedly lapped Intel in the broad semiconductor market.
They’re just the kind of scandalous headlines investors of all sorts not only love to circulate, but embellish as they do so. It’s the embellishment, in fact, that’s been so problematic for INTC stock of late.
What if, however, all the rumors of Intel’s irrelevancy and failure to innovate were just that — rumors?
As it turns out, Intel isn’t quite as dead in the water as the headlines would have you believe. Its newest three products make the point.
1. 5G
Apple may not be in love with Intel’s near-field connectivity tech for 2020’s iPhones, but Apple has long been a fan of Intel’s modems, and should continue to lean heavily on Intel going forward on that front. The newly unveiled iPhone XS sports an Intel modem and there’s a chance Intel could meet the vast majority of Apple’s 5G modem needs come 2019.
It’s not just Apple, though.
As fast as the race to 5G connectivity is being run in North America, China is racing even faster to that finish line. And Intel is helping to make it happen. It’s working with China’s UNISOC Technologies, H3C, Comba Telecom and even Baidu (NASDAQ:BIDU), positioning itself as a go-to 5G solutions provider in that important market.
2. i9 Processor
Several months ago, an i9 processor was more of a dream and less of a product. Intel’s i7 was as good as it practically got.
Not anymore, though. The company’s ninth-generation is almost here and the most premium version of it — the i9-9900K — is a beast. Sporting eight cores and sixteen threads, it hums along at a base speed of 3.6 GHz, but can be boosted up to 5.0 GHz. Intel calls it the best gaming CPU ever — and it probably is. And, reasonably priced at $488, hardcore gamers may well take the plunge. Performance-oriented computer users will be just as pleased with lesser versions of the i9.
3. Vision Accelerator
The term “vision accelerator” may not mean much to the average consumer/investor, but to artificial intelligence developers, it means a great deal.
Vision acceleration is a way of processing more visual data faster. Though sensors can “see” colors and shapes and even figure out distances, computers still aren’t as good as the human eye when it comes to figuring out what something is and how far away it is.
Intel took a big step in closing that gap, however, recently unveiling its family of Vision Accelerator Design Products. These tools can be utilized in a variety of artificial intelligence applications ranging from smart cities to defect-detection and more. It’s a sliver of the AI industry that’s only started to gel.
Looking Ahead for Intel Stock
It’s an impressive lineup to be sure, though one can’t help but wonder: If Intel is doing so many different things, can it do any of them particularly well?
Morgan Stanley analyst Joseph Moore thinks so. He wrote just a few days ago: “The company’s focus on expanding the scope to ‘data centric’ businesses makes cost cutting difficult and arguably can distract from the core business,” adding, “While we can see the arguments for both, we see renewing focus on the core as a lower-risk path to upside.”
His point is well taken, and given the recent pullback from Intel stock, investors at least partially agree.
This is a case, however, where smart investors may want to take a step back and look at the bigger picture — and look at Intel’s competencies. Yes, it got caught with its proverbial pants down by AMD. This is the same Intel that largely defined the computing market we know today. Money and know-how aren’t the problem. The overarching problem is time — Intel needs more of it.
Thing is, Intel stock is apt to move higher again well before it proves all of its top projects right now will pay off. This is still a forward-looking game, even if the market’s temporarily forgotten it.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter, at @jbrumley.
