The chipmaker, Intel Corporation (NASDAQ: INTC) said on Thursday that its board had approved a $15 billion increase to its share repurchase program. The company said it had $4.7 billion remaining under its existing repurchase authorization as of September the 29th. Additionally, the company has set up its chip design center at Bengaluru (India), the largest outside the US. The company has also unveiled the new Neural Compute Stick 2 and the new Core i9-9980XE processor in the past few days, giving it a lead in the PC market.
Intel’s new product range and the share repurchase program
The stock repurchase authorization allows Intel the flexibility to decide the time, quantity, and nature (open market or private deal) of the stock purchase. If the company has other pressing matters to look at, then the terms of authorization allow the company to entirely avoid the share repurchases as well. Between 1990 and the third-quarter of 2018, Intel has paid back approximately $177 billion to investors in the form of dividends and stock repurchases.
Regarding share buyback, Intel said: “it focuses on building value by first investing in itself and growing its capabilities. The company then looks to supplement and strengthen its capabilities through acquisition and strategic investments. Finally, Intel provides the return realized by these investments to its shareholders through its dividend program and opportunistic stock repurchases.”
In addition to share repurchase authorization, Intel also elaborated on the chip design center which was set up with an initial investment of ~$170 million. The design facility, according to Intel, would concentrate on futuristic technology such as the fundamental infrastructure for 5G network.
The design center, built in 44-acre campus, has 620,000 sq. ft. of workspace including 100,000 sq. ft. of the state-of-the-art lab infrastructure. Regarding the chip design center, Intel said: “Extending Intel’s R&D presence in India, it will house technologists who work on cutting-edge engineering across hardware and software.”
On November the 14th, at Intel AI Devcon in Beijing, the semiconductor manufacturer introduced a “Neural Compute Stick 2 (NCS2),” which is originally a self-reliant neural network on a thumb drive. The NCS2 facilitates deep neural network testing, prototyping, and tuning so that programmers can move from prototyping into production capitalizing on the “range of Intel vision accelerator form factors in real-world applications.” Developers will be able to run their applications based on artificial intelligence and computer vision applications in few minutes without any other hardware other than a laptop and the NCS 2.
Commenting on the launch of NCS2, Naveen Rao, Intel corporate vice president, and general manager of the AI Products Group said, “The first-generation Intel Neural Compute Stick sparked an entire community of AI developers into action with a form factor and price that didn’t exist before. We’re excited to see what the community creates next with the strong enhancement to compute power enabled with the new Intel Neural Compute Stick 2.”
Furthermore, Intel has also launched a new Core i9-9980XE processor, which includes 18 physical cores and 36 threads. This high-end desktop processor is manufactured using the upgraded version of the 14nm manufacturing process, which is also used by some of the other generation chips (6th, 7th, and 8th).
The processor has a base clock speed of 3.0GHz and a Turbo Boost clock speed of 4.5GHz. Online reviews and benchmark data for the new chip indicates that the processor offers robust single-threaded and multi-threaded performance. According to benchmark data published by HotHardware, the Intel Core i9-9980XE offers better single-threaded performance than any of the AMD Ryzen Processor and also outperforms all previous-generation Intel chips in multi-threaded performance.
At the company’s 2017 investor meeting, Swan, who is presently acting as Intel’s interim CEO, said the company’s TAM (total addressable market) would be roughly $220 billion by 2021. Intel raised the TAM value to $260 billion at its annual stockholder meeting back in May, and during the October 25 earnings call, the figure was further increased to $300 billion.
Swan said: “That larger TAM and the momentum we’re building across all of our products is a pretty good tailwind as we look at just demand for data, whether it’s with consumers or with businesses going into the New Year.”
The developments mentioned above indicate that the stock will turn bullish in the days ahead.
Technically, the stock is on the verge of breaking above the 50-day moving average. Furthermore, the mainline of the MACD indicator has crossed above the signal line. As a result, we can expect Intel to appreciate in the days ahead.
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