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Abhinav Davuluri

Abhinav Davuluri

Abhinav Davuluri, CFA, is a sector 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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We note Applied and its peers have all called for strong growth in 2021, driven by record capital expenditure levels at TSMC and Intel as well as solid memory spending. Management expects Applied’s fourth-quarter revenue to be up 34% year over year at the midpoint, with momentum persisting into 2022. Consequently, we are raising our fair value estimate to $131 per share from $125.

We remain optimistic on Intel’s IDM 2.0 strategy to get its manufacturing back on track and develop a more meaningful foundry strategy. Nonetheless, we expect the next few quarters to be challenging.

Intel reported fourth-quarter results that significantly exceeded its guidance, primarily due to stronger than expected PC demand related to the ongoing work- and learn-from-home trends stemming from COVID-19. Due to the impending CEO transition from Bob Swan to Pat Gelsinger (effective Feb. 15), management did not elaborate on its outsourcing plans or provide full-year guidance.