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Intel: Solid Results, But Shares Fully Valued

Lowered fourth-quarter guidance won't impact our fair value estimate of this wide-moat tech leader, writes Morningstar’s Abhinav Davuluri.

Third-quarter revenue of $14.5 billion was up 10% sequentially and roughly flat from the same period last year. Although notebook and desktop unit volumes were down considerably year-over-year (14% and 15%, respectively), client computing group revenue was still up 9% from last quarter to $8.5 billion. The PC market appears to be stabilizing, as Intel is seeing stronger average selling prices related to the new Skylake platform and a reduction of subsidies for Bay Trail processors sold into tablets. Data center group, or DCG, sales were at a record high of $4.1 billion as a result of continued strength in cloud spending that led to higher volume and average selling prices.

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The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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About the Author

Abhinav Davuluri

Strategist
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Abhinav Davuluri, CFA, is a strategist for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He covers microprocessors, wafer manufacturing equipment, and other companies in the semiconductor space.

Before joining Morningstar in 2015, Davuluri spent two years as a process engineer for Intel.

Davuluri holds a bachelor’s degree in chemical engineering from the University of Michigan. He also holds the Chartered Financial Analyst® designation.

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