Why Are Analysts Still Bullish on Intel Corporation (INTC)

Intel Corporation (NASDAQ:INTC) is in the news amid reports that the company is mulling over a bid to acquire Broadcom. The move comes amid Broadcom’s aggressive steps to acquire Qualcomm. Intel’s management is worried that a possible merger of Broadcom and Qualcomm would create an undisputed market giant.

Intel Corporation (NASDAQ:INTC) fundamentals remain strong despite of its bleak financial results and problems in legacy business. Intel stock has gained about 48% over the last six months. The company was criticized around the world amid the “Spectre and Meltdown” scandal which revealed several security flaws in Intel chips. Analysts believe that Intel is quickly diversifying its revenue streams. They are bullish on Intel’s data center business, whose revenue is up 20% year over year. Every sub-unit of Intel Corporation (NASDAQ:INTC) data center has show revenue growth of 10% year over year. Intel has started selling Optane memory solutions to enterprise data centers. Optane memory solutions are smart and efficient, and have a huge chance of dwarfing their competitors.

Intel Corporation (NASDAQ:INTC) investments and presence in China are finally paying off. The company recently agreed to provide flash memory devices to Tsinghua, a firm backed by the Chinese government. China imports $200 billion worth of memory devices every year. The country wants to end its reliance on other companies and develop its own infrastructure. While this dependence doesn’t bode well for the US-based semiconductor companies, the fact that Intel got a contract for the development of infrastructure is a huge bullish factor for Intel Corporation (NASDAQ:INTC) stock for at least several years to come. Nikkei reported earlier this month that Intel will provide the Chinese company the NAND chips that are necessary to use in memory devices that are used in mobiles and PCs. In 2015, Intel announced to transform its microprocessor factory in Dalian, China, to manufacture NAND memory chips. Analysts think that the Chinese government will be giving massive orders for in-house production of NAND chips in Intel’s facility.

CNBC’s Todd Gordon recently said that Intel Corporation (NASDAQ:INTC) stock has performed well in the past and it is expected to gain value in the coming months. In February, Citi reiterated a “buy” rating for Intel stock. Citi analyst Christopher Danely said that Intel is the “only” stock that has both poor sentimental value and a healthy upside. He expects the company to beat profits estimates for 2018, with EPS of $3.57. Bank of America analyst Vivek Arya recently said in a report that Intel has about 90% share of the data center market. The company also has a huge advantage in the Cloud and 5G markets. The analyst believes that Intel Corporation (NASDAQ:INTC) data-centric business will grow by double digits, and dwarf its PC revenue.

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