Intel Launches Densest Solid State Drive, Plans 10nm Chip

Intel Launches Densest Solid State Drive, Plans 10nm Chip
August 9, 2018

 

Semiconductor chip manufacturer Intel Corporation (NASDAQ: INTC) has been on a decline due to rising competition from AMD. The stock was also downgraded by Barclays earlier this week, citing similar concerns. However, Intel is gearing up for the competition with its investments in artificial intelligence, plans to upgrade its chipset, and the launch of the world’s densest solid state drive. Therefore, based on the facts provided below, we are expecting the stock of Intel to rally in the days to come. Intel closed Wednesday’s trading at $49.96.

The Santa Clara, California-based company had sold more than 220 million Xeon processors in the past two decades, generating revenues of over $130 billion. However, according to the company, the most recent $1 billion revenue generated from its AI chip is the most significant as it marks Intel’s transition to becoming a data centric company. About five years ago, Intel generated one-third of its revenues from data center chips. Now, the division generates more than half of Intel’s total revenue. To increase its market share, the company is planning to launch Cascade Lake Xeon processor later this year. Notably, it would be 11x faster when it comes to image recognition tasks than the Silver Lake Xeon launched in 2017. The AI chip market is project to reach $200 billion by 2022 and Intel already commands 20% of the market.

To push back competitors, Intel is also planning to upgrade the current chips with an advanced memory technology.  Intel chips have 14 nanometers between transistors, reflecting lower speed. By the end of 2019, Intel aims to launch 10-nanometer chips. Server chips are expected to follow suit in 2020. Until then, Intel is optimistic that its earnings could outgrow that of semiconductor chip market by concentrating on improving the design of existing chips.

Yesterday, the company unveiled the world’s densest solid state drive (SSD). The drive has a capacity of 32 TB. The storage device is only about the size of a 12-inch ruler. This allows efficient use of physical space. Furthermore, the storage device only requires half the cooling required by a hard disk.

To meet the growing needs of AI oriented developers, Intel has trained 99,000 students and developers since April 2017 in India. Mphasis, arya.ai and Philips have joined hands with Intel as partners and clients to advance AI solutions. Intel hopes to make its AI tools available to a range of industries and fuel the next wave of computing through the training program. Therefore, strong sales of AI chips, plans to introduce 10-nanometer chips and launch of 32 TB solid state drive is expected to turn Intel bullish.

The historical price chart of Intel shows that the stock has bounced off the support at 47. Furthermore, the Chaikin money flow indicator is ascending in the positive region. Additionally, the main line of the MACD indicators has crossed above the signal line. So, we can expect an uptrend to begin in the short-term.

Intel - Technical Analysis - 9th August 2018

We are planning to trade the impending uptrend in the price of Intel by investing in a call option contract, which remains active for at least one week. The option may be purchased only if the stock of Intel is trading near $50 in the Nasdaq.

Disclaimer: The trading analysis offered here is our opinion. It is not provided as trading advice, merely an indication of our trading plan. We cannot guarantee success and we encourage traders to incorporate a strong money management strategy to limit losses. Please use this article as part of your own research before formulating strategies prior to trading.

Richard W

Richard W

Richard is the guy who know everything there is about the financial industry, working in a top firm for over 15 years, he will give the lowdown on some of the biggest companies in the world


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