Tag Archives: intc

Intel Could Slough Billions Off Q1 Sales On Notebook Depression

No. 1 chipmaker Intel ( INTC ) could slough $1.2 billion off Q1 sales amid a notebook PC depression, a Nomura analyst wrote Friday as he slashed his price target on Intel stock. Notebook shipments are expected to plunge 28% sequentially in Q1, Nomura analyst Romit Shah wrote in his research report, which he said suggests PC shipments will slump as well. The report comes less than two months after Intel acknowledged that a fatal bug in its Skylake processor could freeze Windows and Linux operating systems under certain work conditions. Intel has since released a fix, but the stock slipped nearly 7% in the three days following that Jan. 6 acknowledgement. Intel stock was down more than 1.5% in afternoon trading on the stock market today , near 29, after Shah cut his price target to 35 from 38. Intel stock touched a five-month low below 28 on Feb. 11. Shah lowered his revenue forecast for Intel’s Q1, now seeing a 20% sequential decline vs. his earlier view for a 7% decline. Citigroup analyst Chris Danely  lowered his notebook forecast on Wednesday, according to ValueWalk.com. Danely forecast a 38% month-over-month decline in notebook shipments for January, where the three-year average had been a 14% decline. Citigroup expects a 20%-25% sequential decline in Q1 notebook shipments, said the ValueWalk story. Shah’s analysis puts Intel’s Q1 sales and earnings per share ex items at $13 billion and 35-40 cents. Intel previously guided to $13.6 billion to $14.6 billion in sales, which implies 50 cents EPS minus items, he wrote. But Q1 remains is typically “a back-end loaded quarter,” Shah wrote, and he reiterated a buy rating on Intel stock.

Tesla Partner Nvidia Delves Into AI With Facebook, Alibaba

Tesla ( TSLA ) partner Nvidia ( NVDA ) forged alliances during Q4 with Facebook ( FB ) and Chinese Internet major  Alibaba ( BABA ) for speedy artificial intelligence chips, Nvidia CFO Colette Kress said late Wednesday on the chipmaker’s earnings conference call. And tech giants Alphabet ( GOOGL ), Microsoft ( MSFT ) and IBM ( IBM ) also are eyeing AI, she said. The arena pits graphics processing units, made by Nvidia and others, against another type of chip called field programmable gate arrays (FPGAs), to power the process. The trend — accelerated machine learning — is good news for GPU-maker Nvidia and Intel ( INTC ), which completed its acquisition of FPGA-maker Altera in December. Fostering AI requires breakneck speed in the data center. Nvidia stock rocketed as much as 12% Thursday, touching a six-week high near 31. Midday on the stock market today , Nvidia stock was up 9%, following Nvidia’s blowout Q4 earnings and its guidance leap. For its fiscal Q4 ended Jan. 31, Nvidia reported 35 cents earnings per share on a record $1.4 billion in sales, flat and up 12%, respectively, vs. the year-earlier quarter, and topping Wall Street expectations. Fiscal 2016 ended with $5.01 billion in sales and $1.08 EPS, up a respective 7% and 4%, to beat the consensus model of 29 analysts polled by Thomson Reuters. Nvidia guided above the consensus to $1.26 billion in sales, plus or minus 2%, for the current quarter. That would be up 9.5% year over year, but down 10% sequentially — a measure Rosenblatt analyst Kinngai Chan, in a research note, called “prudent and appropriate.” Chan sees weak China and Asia gaming demand slugging Nvidia in the first half of fiscal 2017. But gaming was the bright spot for Nvidia’s Q4, where sales flew 25% year over year to $810 million. GPU sales, Nvidia’s bread and butter, rose 10% to $1.18 billion. Nvidia Vs. AMD Pretty Close In the second half of the year, Nvidia could outperform after releasing its newest GPU generation, Pascal, says Chan. “We do not foresee any meaningful market share shifts and continue to see a benign pricing environment,” Chan wrote. Likewise, Pacific Crest analyst Michael McConnell doesn’t expect any major shifts in share between Nvidia and GPU rival Advanced Micro Devices ( AMD ). Both are deeply entrenched in the gaming world — Facebook-owned Oculus recommends GPUs from either to power its upcoming Rift VR games. “We believe further stock outperformance this year will hinge on company progress with PC GPU total addressable market expansion (VR) … given our belief that GPU share gains vs. Advanced Micro Devices have likely peaked,” McConnell wrote in a research note. He has a sector weigh rating on Nvidia stock. Automotive and data center sales remain healthy growth drivers for Nvidia — up 68% and 10% year over year, respectively — but they only comprise about 13%-14% of total sales, McConnell wrote. Sales stemming from Tesla and Nvidia’s joint accelerator chips are included in the data center total. Nvidia CEO Jen Hsun-Huang sees that as a potential boom market. During Q4, Nvidia announced a hyperscale data center platform that accelerates machine learning (AI). He sees the move to AI as “a brand new computing model.” “There are so many problems that computer science has been trying to solve, which algorithmically are just impossible to solve,” he told analysts on Wednesday’s call. “Using an enormous amount of data to train a neural net … is a pretty exciting computation model.”

Micron Snubs Tsinghua, Favors Another Chinese Partnership: Analyst

Micron Technologies ( MU ) rebuffed Tsinghua Unigroup’s $23 billion bid, but that doesn’t mean the memory chipmaker has scrapped plans for Chinese partnership, MKM analyst Ian Ing wrote Tuesday in a research report. That partnership could come in the form of a joint venture, Ing wrote in a research report after Micron’s analyst day on Friday. Ing reiterated a buy rating and 19 price target on Micron stock, which was up 7.3% in afternoon trading in the stock market today , near 10.80. “We think Micron would require control of both IP and production decisions in the structure of any JV,” he wrote. “The biggest benefit to Micron is the ability to produce output as a ‘local supplier’ and national champion for China’s domestic market.” Chinese Investment In Micron China plans to invest $55 billion in local chipmaking businesses by 2020 in an effort to curb reliance on foreign semiconductors. But state-sponsored Tsinghua Unigroup’s bid for Micron was doomed from the start, analysts say, as U.S. regulators would have shut it down. A joint venture, however, wouldn’t necessarily spike regulators’ concerns. Credit Suisse analyst John Pitzer said he “would not be surprised by an equity investment in Micron from one of the Chinese private equity companies.” After its failed Micron bid last year, Tsinghua Unigroup invested $3.8 billion in Western Digital ( WDC ), days before Western Digital announced its plan to acquire flash memory chip maker  SanDisk ( SNDK ). “(Micron) has a presence in all major memory markets, which makes it particularly interesting from M&A or an equity investment target for China Inc.,” Pitzer wrote in a report. “While (the Committee on Foreign Investment in the United States) could be an issue for outright sale, the company could still attract equity investment in China.” Pitzer reiterated his outperform rating and 20 price target on Micron stock. Summit Research analyst Srini Sundararajan rates Micron stock a buy, with a 21 price target. Micron Pulling Ahead In Samsung Rivalry “The backdrop of any buy thesis on Micron over the medium term should be that Samsung is not doing well,” Sundararajan wrote in a research report. Apple ( AAPL ) and Chinese LCD manufacturers are scooping share, and Samsung has yet to squeeze much profit out of its nascent 3D Nand flash chips, he wrote. DRAM (dynamic random-access memory) profitability could be Samsung’s “salvation,” but its capital expenditures cut has yet to bear fruit. DRAMs are the most common memory chips in computers. Meanwhile, Micron is slimming costs, Sundararajan wrote. In 20-nanometer DRAM, Micron is targeting a cost reduction CAGR (compound annual growth rate) of 15%-25% through fiscal 2017, Pitzer wrote. Micron also sees 25% cost reduction CAGR in 3D Nand. “Any progress in closing the cost ‘gap’ will drive stock performance,” Pitzer wrote. A rebound could pull Micron stock out of its trough, Mizuho analyst Vijay Rakesh wrote in a report as he upgraded Micron stock to buy from neutral. Sundararajan also expects Micron to let Intel ( INTC ) work out the kinks in the jointly-owned 3D X-Point chip and then “exploit it advantageously” from 2018. “Good times will come should Micron execute,” he wrote. “Micron has dashed hopes and portfolios in 2015, hence it is important to ignore those getting out of Micron stock and take a fresh look.” Even with Tuesday’s gain, Micron stock is roughly 70% off a nearly 16-year high touched in January 2015.