Author Topic: INTC - Intel  (Read 103035 times)

tng

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Re: INTC - Intel
« Reply #10 on: September 11, 2012, 07:48:43 AM »
People forget that the demand for computing is going up. And most real computing is done on Intel chips. For example, 5 minutes ago I typed two lines into a terminal and 100+ Intel CPUs will be running hot for the rest of the day. My colleague just placed an order to buy six more very expensive servers containing lots of Intel chips. There will always be demand for "desktop" processing, and that demand is going up. Stuff like computerized trading on the stock exchange, Apple's Siri, Google's artifical intelligence algorithms to put ad's on webpages, etc all require some serious computing power. The casual computer user who walks around with his smart phone doesn't realize how much computing is done all around him to provide him with services he uses all the time. I would not be surprised if in a few years, every cable set top box will be a full fledged computer. If Intel goes down some more, it will start to approach a price where you don't need growth for it to still be an attractive stock. The growth is currently in mobile, but I don't think there is any big threat to Intel's business of making very fast, hot, power burning processors that are only suitable for being plugged into the wall.

Intel decided to pour all their money into making chips that ran faster and faster, without regard for power and heat because they were targeting the enterprise business and they expected everybody to be on desktops. They didn't see the mobile trend happening, so ARM had a vastly superior product because they were the only ones focusing on low power. Now that Intel is pouring all their money into low power, how long is ARM going to be the superior product? I don't think ARM has any real advantage over Intel other than that they started researching low power chips earlier. But those advantages narrow very quickly.


kevin4u2

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Re: INTC - Intel
« Reply #11 on: September 11, 2012, 08:17:52 AM »
Perhaps this quote made by the CEO of Intel, Paul Otellini, during the Q4 2010 Conference call will will perk some interest.

In 2010, total traffic crossing the internet was roughly 245 exabytes. This is greater than all the previous years combined. Over the next five years, a billion more people will join the global online community with 15 billion new connected devices including PCs, tablets, embedded devices and smart TVs. We estimate this will increase the data footprint across the Internet to over 1,000 exabytes. More people, more devices, more usages.


Liberty

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berkshiremystery

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Re: INTC - Intel
« Reply #13 on: September 14, 2012, 05:25:03 PM »
Why is Berkshire Dumping Intel?
Sep. 14th, 2012
http://wallstcheatsheet.com/stocks/why-is-berkshire-dumping-intel.html/?ref=YF

<snip>...
According to National Association of Insurance Commissioners data compiled by Bloomberg, Berkshire purchased 11.5 million shares of California-based Intel for an average price of $22 each throughout the second half of 2011. The firm sold its shares through May 8 of this year, for an average price of $27.25 and a total profit of $60 million.
...</snip>



http://holdings.nasdaq.com/asp/OwnerPortfolio.asp?sHead=&HolderName=BERKSHIRE+HATHAWAY+INC&CIK=0001067983&Selected=&SortBy=name&Descending=A




Liberty

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berkshiremystery

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Re: INTC - Intel
« Reply #15 on: September 15, 2012, 01:48:59 AM »
http://arstechnica.com/information-technology/2012/09/intel-researchers-put-wifi-inside-the-processor-that-is/

Liberty,...

thanks for posting,...
seems some interesting new idea to put WiFi directly inside a CPU's.
I knew about Moore's Law" through all those years, but the term "Moore's law Radio" is totatally new.


<snip>...
At the Intel Developer Forum in San Francisco, Intel Chief Technology Officer Justin Rattner unveiled a pair of technologies coming out of Intel Labs that will overcome many of the size and power limits that have stood in the way of integrating radio technology more tightly with computers and other digital devices. The first, what Intel calls the "Moore's Law Radio," is a complete WiFi transceiver on a 32-nanometer scale silicon chip; the second, called Rosepoint, is a complete system-on-a-chip that integrates two Atom processor cores with a digital WiFi transceiver....</snip>


------

I would everybody encourage to read "The Singularity Is Near: When Humans Transcend Biology" by Ray Kurzweil, probably the best book ever written about Moore's Law and the exponential growth of technology.

The Singularity is Near - Wikipedia.org
http://en.wikipedia.org/wiki/The_Singularity_Is_Near



http://www.amazon.com/The-Singularity-Is-Near-Transcend/dp/0143037889/

Ray Kurzeil - Wikipedia.org
http://en.wikipedia.org/wiki/Ray_Kurzweil


« Last Edit: September 15, 2012, 01:57:16 AM by berkshiremystery »

Liberty

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Re: INTC - Intel
« Reply #16 on: September 15, 2012, 07:57:54 AM »
I would everybody encourage to read "The Singularity Is Near: When Humans Transcend Biology" by Ray Kurzweil, probably the best book ever written about Moore's Law and the exponential growth of technology.

The Singularity is Near - Wikipedia.org
http://en.wikipedia.org/wiki/The_Singularity_Is_Near



http://www.amazon.com/The-Singularity-Is-Near-Transcend/dp/0143037889/

Ray Kurzeil - Wikipedia.org
http://en.wikipedia.org/wiki/Ray_Kurzweil

I've read it. It is certainly interesting to extrapolate out non-intuitive exponential curves for technological progress, though I'm not quite sure that all of Kurzweil's predictions will take place in that timeframe since many depend on software/math breakthroughs and not just size-of-components and power-of-computation advances. But certainly thought-provoking stuff worth reading, and even if a small fraction of what he predicts happens anytime soon, the world will be very different.


jjsto

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Re: INTC - Intel
« Reply #17 on: September 15, 2012, 08:13:28 AM »
Yeah, good book.  Now I just need to figure out how unleash the same forces so a singularity will occur in my portfolio :)  Here is an old charlie rose clip:  http://www.charlierose.com/view/interview/672 

west

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Re: INTC - Intel
« Reply #18 on: September 15, 2012, 10:15:33 AM »
thanks for the responses.

I think most of us who are long or bullish on INTC have the same reasoning: big company that will eventually come around, PCs are not dying, and Intel is cheap with good dividend yield.

I'm not a technology guy at all, but I think a lot of people are worried that PCs are going into extinction or something. At 10x p/e it doesn't add up.

Frank, please keep in mind that Intel is a cyclical business, so P/E isn't as useful for valuing the company as P/E in a non-cyclical business.  If you look at the ValueLine that berkshiremystery posted, you'll see the earnings of Intel are all over the place.  They earned $1.40/share during 2005, but then only earned $0.86/share in 2006.

I'm not saying Intel's a bad buy though.  Just don't judge it based off of one year's earnings or P/E ratio.  Maybe use normalized earnings or some alternative ways of valuing them.

The book Value Investing by Bruce Greenwald actually has a chapter where he uses his rough-guide valuing methodology to come up with a value for Intel.  I'm guessing a lot of what he wrote then still holds true today, so you may want to check it out.

Here's a good quote about buying cyclical businesses:

"Buying a cyclical after several years of record earnings and when the P/E ratio has hit a low point is a proven method for losing half your money in a short period of time." - Peter Lynch

mikazo

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Re: INTC - Intel
« Reply #19 on: September 21, 2012, 06:35:10 PM »
As a software developer by profession, I can attest that desktop computers and servers are not going away. It would be impossible to develop software on a tablet or a smartphone. You need a powerful desktop computer that can compile quickly, run multiple virtual machines, etc. Same for build servers, source control servers, mail servers, IM servers, testing setups, etc. All of that requires machines with powerful processors, of which Intel is the main producer.

Software development is growing too, because all these tablets and smartphones that are part of the mobile craze need smarter servers, routers, content providers, etc. to handle the growth.

Regarding Moore's Law, high-end processors topped out around 3-4 GHz clock speed ages ago. It's all about more cores and more parallelization now. When I looked into Intel last year, I remember reading somewhere about them developing tools to help make it easier for software developers to write applications that take advantage of parallel processing. It's a hard problem to deal with, but it can be manageable.

Just my abstract two cents on Intel's growth opportunities.