My own portfolio holds shares of both memory-chip maker Micron Technology (NASDAQ:MU) and PC/server processor giant Intel (NASDAQ:INTC). I'm hardly alone in pairing these stocks, since many investors in the semiconductor industry find reasons to believe in both businesses. But which one should you pick if you're looking for chip stocks today and only have room for a single ticker? Let's have a look. ![]() Image source: Getty Images. By the numbers, Micron is the clear winnerComparing Intel's and Micron's financial data and market returns side by side, it's almost impossible to pick Intel.
So Micron's business is growing faster, investors are booking some massive gains, and the stock still looks extremely cheap. It's not easy to find single-digit P/E ratios tied to market-leading tech giants. So from a purely numerical perspective, Micron is the obvious choice. But that's not the whole storyMicron is arguably cheap for a reason. The memory chip market has been prone to brutal price wars every couple of years, followed by quiet periods where chip prices stabilized and Micron shares skyrocketed. The theory behind Micron's ultra-low valuation ratios is that the next round of plummeting chip prices must be just around the corner. Street prices are indeed falling again after nearly two years of solid -- sometimes even rising -- pricing. Micron's management expects strong market demand from memory-hungry smartphones, automotive computing, and solid-state storage devices to support a profitable production level in 2018 and 2019. That's not good enough for some skeptics, who see the lower chip prices lasting longer than Micron's leadership expects. If you agree with that view, you might want to throw away Micron's numerical advantages and take a closer look at Intel instead. The case for IntelThe processor titan is experiencing some issues of its own. The next jump to a more efficient manufacturing technology is running late. A hiccup in the mighty manufacturing machine is giving rival Advanced Micro Devices (NASDAQ:AMD) an opportunity to steal market share for a few quarters. But that's not the end of the world. Intel CFO Bob Swan published an open letter near the end of September, explaining that the market demand for PC and server chips is stronger than expected. The company is being forced to prioritize manufacturing of high-end, higher-margin products and leave the lower end of the markets underserved. Intel is investing $15 billion in capital expenses this year to upgrade its facilities in four chip factories. The manufacturing delay is now on track to end in 2019. More to the point, Intel's largest target markets are acting healthier than expected. So Intel appeals to investors with a yen for established market leaders, truly massive shipment volumes, and slow-but-steady growth prospects for the long run. This is your pick if Micron's volatility just doesn't float your boat. Again, there's nothing wrong with owning both Intel and Micron. I have no plans to sell either one, for example. But they do come with very different investment theses, so make sure to pick the one that's a better fit for your own needs. Anders Bylund owns shares of Intel and Micron Technology. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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[unable to retrieve full-text content] [unable to retrieve full-text content] ![]() Ireland is set to benefit in a $1bn (€861m) uptick in capital spending by the chip maker Intel following an unexpected rise in demand for chips for desktop computers. The American multinational said it would spend a record $15bn on capital expenditure this year, up by $1bn from last year. The extra $1bn is going into its manufacturing sites in Ireland, Israel, Arizona and Orgeon, according to Bob Swan, the interim chief executive of Intel. The tech giant has had a presence in Ireland since 1989 and has invested almost $14bn to date in its campus at Leixlip, Co Kildare, where more than 4,500 people are employed. The company announced a $5bn “campus upgrade” for Leixlip in 2014, its last investment announcement relating to the… Read More Intel chips in $1bn to power up production : https://ift.tt/2DP09Ds![]() Intel has a long, storied history in the tech sector and is generally regarded as somewhat of a patriarchal, conservative entity, at least as far as its public image is concerned. Intel doesn’t often participate in public spats with competitors and even when the company does decide to be vocal on a particular topic, it usually won’t name any competitors outright. In one of its latest News Bytes, however, written by executive vice president and general counsel of Intel Corp., Steven R. Rodgers, Intel lambastes Qualcomm and goes so far as to call it an “unlawful “no license, no chips” regime”. Qualcomm is entangled in patent litigation with a number of companies around the globe, including Intel and Apple, claiming many of those companies could not have produced their wireless products without having infringed on Qualcomm’s patents. Qualcomm essentially claims that its patents are the foundation of current and many future mobile communications technologies, so any company producing cellular modems and related wireless transceivers for mobile networks is a potential patent violator. And Intel 5G Modem.Intel In the post, Steven R. Rodgers points out that Qualcomm has already been fined $975 million in China, $850 million in Korea, $1.2 billion by the European Commission, and $773 million in Taiwan for anticompetitive practices, though the case in Taiwan was settled for a reduced fine. He also mentions that Qualcomm has been found in violation of Japanese competition laws and that the U.S. is currently going after Qualcomm for potential antitrust violations. “For the most part, we have chosen, and will continue to choose, to respond to Qualcomm’s statements in court, not in public.” said Rodgers, “This week, in one lawsuit, Qualcomm failed to win its case on 88 patent claims it said were infringed by products, including Intel’s modem.” In another case, however, Rodgers also mentions that a federal judge found compelling proof that Qualcomm has required some companies accept a separate license for Qualcomm’s cellular patents in order to gain access to Qualcomm’s modems for their products. This, Rodgers claims, is the basis of the “no license, no chips” maneuver that has landed Qualcomm in hot water in a few countries. There are still a number of lawsuits in progress, so how this all shakes out as future 5G and newer networks and devices roll out remains to be seen, but you can expect plenty of fireworks over the next few years as all involved continue to vigorously defend their patents and associated technologies. Read More Intel Targets Qualcomm In Response To Recent Litigation Developments Over Modem Patents : https://ift.tt/2zFV6S1![]() BIRMINGHAM, England—Near the back of the EGX Expo hall, two players battle it out over a game of Hearthstone. Watching their moves on two large screens is a crowd of maybe 40 people, with commentators discussing each play. Surrounding the players are suits of armor and fake bags of loot from the eSports League and Intel, two organizations looking to push eSports further into the public consciousness. EGX isn't Intel's first foray into the eSports market. It's been hosting much bigger events for 12 years now, starting in 2006 with the first Intel Extreme Masters, a series of international eSports tournaments. This year, there have been Masters' events in Sydney and Shanghai; later this year, the competition comes to Chicago before stopping in Katowice, Poland, early next year. The phenomenon is only going to grow, Scott Gillingham, Intel's VR and eSports lead, told PCMag at EGX. He pointed to the 2017 Katowice competition, which attracted 173,000 attendees in the arena and more than 46 million viewers online. Gillingham tells us that the number of online views hit an astonishing two billion. For Intel, the increased interest in eSports has a number of benefits—most notably that more people will need computers capable of running today's most popular PC games. On the EGX show floor, there were a number of compact laptops and tiny gaming powerhouses, as well as the more traditional "gamer PCs." These PCs must support a collaborative experience, something Intel touted on banners that read: "Game, Record, Stream." "Gamers [are] recording their game and they're streaming it on Twitch and they're sharing it socially with their community and their friends," said Gillingham. "Now if you're doing that at the same time, you need much more performance...to maintain 60 or 70 frames per second." According to Statista, the average number of concurrent viewers on Twitch during Q2 2018 was about 1,040,000 versus 326,000 for YouTube Gaming Live, up from 953,000 and 271,000, respectively, the previous quarter. Twitch has seen a steady climb since Q3 2017, whereas YouTube has had ups and downs. YouTube recently discontinued its standalone YouTube Gaming app after three years in favor of a new gaming hub, where you can browse uploaded videos and live streams. With 2.21 billion gamers worldwide at the end of 2017, according to Statista, there's still room to grow. VR on the HorizonBut there's another area of tech where powerful computers are necessary and that's virtual reality. Intel is hoping to push VR into the mainstream, which will require powerful chips and—for now—gaming PCs. While Hearthstone or Dota 2 don't work well with a VR headset, Intel's partnership with ESL and Oculus has resulted in competitions like the VR Challenger League at this year's Intel Extreme Master, where players battled it out playing Echo Arena from Ready At Dawn Studios and The Unspoken from Insomniac Games. Adoption is still slow, though. "I think the overall eSports players, they're not all rushing to do this... that's a slow process. But the ones that have done it have [had] a great experience, [so] there's a definite future there with VR coming," said Gillingham. "I think there's a stigma today that [for virtual reality] I've got to have a huge PC. At the end of the day, VR is a luxury thing today, [but] let's build a product that's a bit more consumer-friendly". Intel's already taking that step with products such as the Hades Canyon, which is Intel's smallest VR-capable system. It arrived this spring looking like a tricked-out wireless router and is the sort of thing you could see sitting under your television in lieu of cable box. That comparison becomes more apt in the UK, considering Sky's push into the VR space, BT's experiments with VR sports in 2016, and Intel's own True View technology, which has also been used to watch the American NFL, NBA, and NCAA tournaments in VR. VR headsets and gaming PCs still don't come cheap, which Gillingham acknowledged. But he predicts a price drop over time, like most product categories. As if to underline his point, Facebook recently showcased the Oculus Quest, a $399 wireless headset that CEO Mark Zuckerberg describes as the "all-in-one VR experience we have been waiting for." But while wireless connectivity is an important step forward, the headset still looks big and bulky, and it remains to be seen how much this gets adapted in the US and the UK. Nevertheless, Intel is betting that products like the Quest will fuel ease-of-access in the home and attract more people to live events. "A lot of the weekly [stuff] is done online, and that can be through Twitch, it can be through Facebook, it can be through lots of different online platforms, but there's also a passion to come to an event and view it live," Gillingham said. And while a company will always say that the flow of the market dictates product launches, in this particular space it does seem possible that the eSports community could help shape the future of PC tech. Read More Why Intel Is Betting on eSports and Virtual Reality : https://ift.tt/2xZH7Er![]() Intel issued a sharply worded statement Friday evening disputing rival Qualcomm's allegation that Intel had stolen technology to use in Apple's iPhones. "It is easy to say things. But Intel's track record is clear," Intel general counsel Steven Rodgers wrote on the company's website. He noted that courts have previously ruled against Qualcomm's charges of patent infringement and unfair business practices. "As one of the world's largest patent holders, Intel respects intellectual property," Rodgers said. "But we also respect truth, candor and fair competition. And we look forward to continuing to compete with Qualcomm." As part of ongoing litigation with Apple, Qualcomm alleged earlier this week that Apple had stolen software to improve Intel modems for iPhones. Amid the litigation, Apple dumped Qualcomm modems from the latest iPhone models and switched to Intel technology. -- Mike Rogoway | twitter: @rogoway | 503-294-7699 Read More Intel fires back at Qualcomm, denies stealing technology : https://ift.tt/2xVFCal(Reuters) - Wall Street ended flat on Friday as gains by Intel, real estate companies and utilities offset a drop in Facebook after the social media network disclosed a security breach. The S&P 500 lost 0.5 percent for the week, but for the third quarter it was up 7.2 percent, its best quarterly performance since the fourth quarter of 2013. Facebook Inc (FB.O) slumped 2.59 percent for the session after it said it discovered a security issue affecting about 50 million accounts. Its loss weighed more than any other stock on the S&P 500. Intel (INTC.O) jumped 3.08 percent and was the biggest boost on the three major indexes after the chipmaker said it was optimistic it would meet its full-year revenue target. Smaller rival Advanced Micro Devices Inc (AMD.O) tumbled 5.22 percent. The Philadelphia SE Semiconductor index .SOX gained 0.65 percent, also boosted by Nvidia’s (NVDA.O) 5.09 percent jump on bullish comments from Evercore ISI. The S&P 500 technology index .SPLRCT rose 0.43 percent. Italy’s new government proposed a 2019 budget with a deficit three times bigger than the previous administration’s target, sparking a sell-off in European stock markets and a drop in U.S. Treasury yields as some investors shifted their focus to the United States. “Italy is weighing on people’s minds as to where they want to be,” said Thomas Martin, senior portfolio manager at Globalt Investments in Atlanta. “The U.S. is the place to be, and the rest of the world - not so much.”
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., September 20, 2018. REUTERS/Brendan McDermid
The S&P 500 utilities and .SPLRCU and real estate .SPLRCR indexes, which typically benefit from lower interest rates because of the dividends their components pay, were the strongest performers among 11 indexes, both up more than 1 percent. The Dow Jones Industrial Average .DJI ended 0.07 percent higher at 26,458.31 points, while the S&P 500 .SPX was essentially unchanged at 2,913.98, down 0.02 point. The Nasdaq Composite .IXIC added 0.05 percent to 8,046.35. Helping sentiment was Commerce Department data showing consumer spending rose steadily in August, while inflation stayed at the Federal Reserve’s 2 percent target. “The theme of today is a continuation of solid economic numbers, as investors make comfortable positions ahead of the next quarter,” said Kate Warne, principal and investment strategist at Edward Jones in Des Peres, Missouri. With the third quarter now wrapped up, investors will begin to focus on corporate financial reports due out in the next few weeks. Bolstered by a growing economy, deep corporate tax cuts and increased stock buybacks, S&P 500 companies are expected to report earnings per share up 21.6 percent over the year before, according to Thomson Reuters I/B/E/S. Tesla (TSLA.O) sank 13.90 percent, its worst day since November 2013, after U.S. regulators sued Chief Executive Elon Musk, accusing him of fraud in a lawsuit that seeks to remove him as CEO, which could make it difficult for the loss-making electric-car maker to raise more capital. Advancing issues outnumbered declining ones on the NYSE by a 1.25-to-1 ratio; on Nasdaq, a 1.17-to-1 ratio favored advancers. The S&P 500 posted 26 new 52-week highs and 18 new lows; the Nasdaq Composite recorded 77 new highs and 73 new lows. Volume on U.S. exchanges was 7.0 billion shares, compared to a 6.8 billion average over the last 20 trading days. Reporting by Amy Caren Daniel in Bengaluru; Editing by Nick Zieminski and Leslie Adler
Our Standards:The Thomson Reuters Trust Principles.
Read More Facebook's slide stalls Intel-led advance on Wall Street : https://ift.tt/2OYtLQe
![]() Intel interim CEO Bob Swan issued an uncharacteristically frank letter today, highlighting the company’s supply issues. The executive blames the surprising growth of an unexpectedly rebounding PC industry for the shortage. Swan says that rebound is driven by “strong demand for gaming as well as commercial systems.” It’s a bit of a perfect storm here. Higher demand coupled with the longstanding yield issues for its 10nm architecture have spread things thin for Intel. Though Swan says it’s “making progress” with those chips, with production ramping up in 2019. “[S]upply is undoubtedly tight,” Swan acknowledged in the letter, “particularly at the entry-level of the PC market.” But he believes that Intel does have enough supply to meet its full-year revenue outlook. In the short term, Intel plans to prioritize the premium market, including Xeon and Core processors, so it “can serve the high-performance segments of the market.” Beyond that, the company plans to invest $15 billion in capital expenditures this year, including $1 billion going toward the manufacture of 14nm silicon in the U.S., Ireland and Israel. These issues have left the broader PC industry in a rough spot. On the face of it, a shortage due to increased demand seems like a good problem to have, but ultimately a lack of processors could create a major issue if the market continues to grow, perhaps ultimately reversing some of that success. Read More Intel acknowledges supply issues, will prioritize premium chips : https://ift.tt/2xYO0Wv[unable to retrieve full-text content] |
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