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Intel's Data Center Focus Limits Apple's Mac Chip Plan Impact

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IntelINTC shares declined 6%, closing at $48.92 on Apr 2 following a Bloomberg report , which stated that Apple AAPL is planning to replace the semiconductor giant's chips used in Mac computers by its own from 2020.

Despite the plunge in shares, we believe Apple move will have limited impact on Intel. This is because the iPhone-maker is currently not a major player in the traditional PC market.

Per IDC report, Apple accounted for only 7.3% in "traditional PC unit market share" in the fourth quarter of fiscal 2017.

Data Center, Self-Driving Car: Key Catalysts

Intel's focus on data center, cloud, self-driving car and Internet of Things (IoT) are key growth drivers. The company has made significant advancements in this area as well and it is now offering more integrated solutions that will likely be competitive on a cost per watt basis.

Intel's investments in field programmable gate array (FPGA) for acceleration (dramatically increases performances at very low power) and memory to reduce latency and increase speeds are helping it develop custom solutions for big players.

Moreover, Intel's acquisition of MobilEye now enables it to offer almost anything related to self-driving vehicles - cameras, in-car networking, sensor-chips, roadway mapping, cloud software, machine learning and data management.

Intel Corporation Revenue (TTM)

Intel Corporation Revenue (TTM) | Intel Corporation Quote

The buyout will aid the company rapidly penetrate the autonomous car technology market, currently dominated by the likes of NVIDIA NVDA and Qualcomm.

Moreover, in August 2017, the chip-maker announced plans to build 100 "level 4" vehicles to test its self-driving technology. Intel has also announced "level 5" autonomous driving platform based on EyeQ5 and Atom, which will sample over the next few months.

Additionally, the company has also been a long-time supplier to Alphabet's GOOGL Waymo division. Further, its partnerships with BMW, Nissan, Volkswagen AG, and Ferrari will boost sales of processing chips, sensor-chips, cloud software and many more, which will drive top-line growth.

Intel has become a notable player in the Internet of Things (IoT) market post the Altera acquisition.

Zacks Rank

Intel carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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