Data is the new oil.
Companies all across the map – from Facebook and Google to McDonald’s and The North Face – are now harnessing data to make better business decisions and increase appeal to customers or clients. This increased use of data – 90% of the which was generated in the past two years, according to IBM – has resulted in a wealth of new business opportunities for tech start-ups and incumbents alike.
Intel (INTC) is one of those companies – the chipmaker is slowly shifting its business from PC-centric to data-centric, a market which EVP Navin Shenoy says will markedly increase Intel’s total addressable market. MKM managing director Ruben Roy is bullish on Intel has the company continues to focus on data; Roy has reiterated his Buy rating and $58 price target. (To watch Roy’s track record, click here)
Roy says that Intel “continues to re-shape its story” as it shifts to data. The analyst says that, while the average investor “has been trained to view Moore’s Law as the most important metric related to INTC’s product,” we should be excited about Intel’s “increased emphasis on adjacent technologies… (which has enabled it) to address a larger TAM.” Roy believes it “likely (will take) time for investors to embrace a significantly different way to think about INTC,” but nonetheless expects the company to be “rewarded”
While Roy is optimistic about Intel in the long term, he notes concern on macro trends that could derail Intel in the near-to-medium term. He says, “given increasingly negative industry commentary from semiconductor peers through September quarter earnings reports…concerns regarding shipping ahead of true demand and the potential for an inventory correction over the next few quarters are likely to persist.” This is a challenge that Intel’s rivals face, too, but is expected to subside in the second-half of next year.
The Street is slightly less optimistic about Intel. TipRanks analysis of 31 analysts shows a Moderate Buy analyst consensus, with 15 analysts recommending Buy, ten recommending Hold and six recommending Sell. The company’s $53.85 average price target represents a 13% upside potential ahead. (See Intel’s price targets and analyst ratings on TipRanks)