UBS Takeaways from Intel Corporation (INTC) Developer Forum Day 1

New IDF initiatives offer great promise for Intel, says UBS

Intel Corporation (NASDAQ:INTC) through day one of its Intel Developer Forum (IDF) provided updates on three initiatives: increased focus on virtual reality (VR), sensors, and artificial intelligence (AI). For UBS analyst Stephen Chin, these initiatives offer promise, and accordingly, he expects sustained near-term momentum from INTC’s data center chip sales, as well as possibly stabilizing PC chip demand.

Chin reiterates a Buy rating on INTC with a price target of $40, which represents a 14% increase from where the stock is currently trading. The analyst explains his bullish perspective, asserting, “We keep a Buy rating as we believe its data center sales can grow 12% yoy this year and its PC sales are not worsening.”

One key takeaway from the IDF, Chin notes that the Intel custom foundry (ICF) business will likely be an opportunity that will help more in the future come 2018, but these updates include broader ecosystem support. Chin affirms, “We believe these updates were modest positives and estimate the key customer win that could really move the needle would be a foundry win at Apple. Another uncertainty is how aggressive could Intel be with its foundry pricing to win new customers.”

Additionally, Chin recognizes the future of success in wireless hinging upon a greater use of 5G wireless ecosystem penetration. The analyst opines, “Intel is actively engaged in the 5G standard development and even if it is successful in introducing a 5G modem chip early, we estimate meaningful sales could be in 2018 at the earliest. In the near term, we continue to believe that Intel won some of the sockets in the new iPhone but what % share it will supply remains unclear.”

According to TipRanks, four-star analyst Stephen Chin is ranked #518 out of 4,124 analysts. Chin has a 65% success and yields 6.2% in his yearly returns. When recommending INTC, Chin earns 6.5% in average profits on the stock.

TipRanks analytics exhibit INTC as a Buy. Based on 27 analysts polled in the last 3 months, 18 rate a Buy on INTC, 7 maintain a Hold, while 2 issue a Sell. The 12-month average price target stands at $37.77, marking just under an 8% upside from where the shares last closed.

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