Intel’s (NASDAQ:INTC) Mobileye gets very little attention. The unit develops self-driving cars and advanced driver-assistance systems. As electric-vehicle stocks enrich speculators, INTC stock is stuck. The chip giant could reduce its reliance on the personal computer market and turn investors’ attention to Mobileye; then its shares could rise as those of Ambarella (NASDAQ:AMBA) did.
But that scenario is a dream. For now, Intel is jump-starting its desktop chips in an effort to catch up to Advanced Micro Devices (NASDAQ:AMD). In the near-term, AMD will be the top, high-end, gaming chip supplier. Intel, however, is well-positioned to grow its market share in the budget and mainstream markets.
Alder Lake Will Lift INTC Stock
Earlier this month, Intel launched a refresh to its CPUs. The Core i9 12900K is getting rave reviews. Investors should read reviewers’ praise for Intel’s refreshed lineup. For the upcoming holiday season and into 2022, there’s a good chance that consumers will upgrade and pick Intel over AMD.
PC Gamer gave Intel’s 12900K a score of 89%. The site said the chip has great single-threaded performance, improved multi-tasking ability, and is the best support platform for DDR5 and PCIe 5.0.
DDR5 is the company’s next-generation memory chip, and investors expect demand for the product, which is as good as AMD’s competing offerings, to accelerate. Gamers need those faster chips to get the most from their CPUs and graphics cards.
The DDR5’s architecture has more cores, bandwidth, and speed than its predecessors. It is Intel’s first chip on the 7 nm process node . The company’s departure from the 14nm process node is long overdue. For many years the process nodes of Intel’s products consistently shrank, decreasing their production cost and increasing their performance.
Now Intel is taking a different approach. It added both P-cores, or Performance Cores, and E-Cores, or Efficient cores, to its CPUs. Gamers want more P-Cores and clock speeds as high as 5.2GHz. Intel has an edge over AMD as these features minimize the latency of Intel’s chips.
Intel built the E-cores by utilizing its legendary Atom architecture that uses comparatively little power. As a result, the E-Cores will increase the performance of multi-threaded CPUs and gaming CPUs.
Gaming Stocks
Investors can also consider buying shares of Corsair Gaming (NASDAQ:CRSR) alongside Intel stock. Corsair recently posted strong, full-year 2021 revenue guidance. It expects net revenue in the range of $1.825 billion to $1.925 billion and EBITDA, excluding certain items, of $190 million to $205 million.
While supply constraints hurt Corsair’s outlook, the high-end gaming supplier offers solutions powered by the chips of AMD and Intel. Look for Corsair’s customers to pick the Intel-powered systems, validating this article’s bullish stance on Intel.
Fair Value
Of the 22 analysts covering Intel stock, 12 have a “neutral” or “hold” rating. The analysts have an average 12-month price target of $53.81 on the shares, TipRanks reported.
Investors should ignore the analysts’ cautious outlook. Unless speculators panic sell tech names in general, INTC stock is unlikely to fall further. Its trailing price-earnings ratio is below ten times, and the stock pays a healthy dividend of $1.39 annually, which works out to a yield of 2.8%.
It will take a few months for consumers to appreciate Intel’s Alder Lake chip. As more gamers praise the product, the sales of the chip will rise.
Risks
Intel has fooled hopeful investors before each of its earnings reports. The stock usually rallies in anticipation of guidance increases by the chipmaker,. but falls when Intel lowers its guidance and reports production or research and development delays.
Those days are probably over. Intel’s leadership has improved due to the appointment of its new CEO, Patrick Gelsinger His leadership of VMware (NYSE:VMW) for eight years has given him relevant software experience.
The Bottom Line
With few technology stocks on sale, Intel is the exception. It has disappointed investors many times in the past. Those days are probably over, due to its new CEO. Intel lags AMD in certain areas, but Intel will thrive as it meets the needs of the mainstream and budget markets.
On the date of publication, Chris Lau did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
