Intel’s share price highly undervalued

June 10, 2013 9:36 am

The company’s future is looking more than stable as investors have predicted for this year. The company is well positioned and hoping to receive gains from its smartphone and tablet chips. Strong performance in server sector and increased PC sales are said to beat investors’ predictions.

PC sales this year have been suffering immensely as smartphones and tablets are occupying the market. All of a sudden Intel found itself exposed to the red side of the market as the company allocates more than 60% of its business to PC sales. The largest chip maker takes 80% of market share for desktops and even larger percentage – 87% for laptop chips.

In a need of a shift in direction Intel is outspending its competitors in mobile chip research and recently has presented its Atom chips. Those chips have been in the core of Intel’s success as Asus and Samsung have switched some of their models towards Atom technology. A future vast increase in mobile chip sales would not increase profits by much but would increase the demand of server chip sales. And server chip market is dominated by Intel and is far more profitable than mobile chip market.

On top of that PC sales drop is expected to almost vanish next year. According to analysts cited by The Wall Street Journal PC market is more resilient than expected. Wells Fargo analyst David Wong shared with the journal expectations of Intel returning gains from PC sales next years on emerging market demand as company’s main competitor Advanced Micro Devices (AMD) is losing market share.

Intel Corp. recorded a daily loss of 0.24% on Friday but investors consider its share price of $24.67 as cheap and some of the bravest predictions suggest doubling of Intel’s shares in next year or two.

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