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Intel ‘Purley’ Impresses; Bears Still Doubt Return to Data Center Growth

The reviews are in for Intel’s (INTC) chip unveiling yesterday, and the Street has been offering up their reviews today.

On the whole, no change in the bull and bear debate. While both sides were impressed, the bulls on Intel shares believe it can return the company’s data center unit to double-digit growth next year. Bears doubt it will provide much lift, citing “secular” challenges to Intel, including the move away from microprocessors in the data center and cloud to other types of processing, such as Nvidia’s (NVDA) GPUs.

Intel discussed details of its “Purley” rev of its Xeon server chips, now ofificlaly “Xeon Scalable,” and the head of the company’s data center business, Navin Shenoy, told me that he believes the company has “a clear leadership” versus competitor Advanced Micro Devices (AMD).

The stock got one initiation of coverage today, by Stephen Turner of Hilliard Lyons, who started the stock at “Long-term Buy,” with a $41 target. Turner’s remarks don’t focus on yesterday’s event; instead, he has more general remarks in Intel’s favor:

We have a positive view of Intel’s strategy shift toward the data center, connecting end devices including autos, and away from a PC centric focus. We also have a positive view of the company’s history of consistent dividend growth, share buybacks, and synergistic M&A strategy.

Here are some other thoughts from the Street:


David Wong, Wells Fargo: Reiterates an Overweight rating. "We believe this new datacenter platform will help drive growth in Intel’s data center segment in the second half of 2017. With its largest datacenter early ship program and the launch of its next-generation server process platform, we think Intel’s DCG (datacenter group) growth could well rise solidly into the double-digit percent year/year growth range in the second half of the year [...] We believe that over the last few years, the move up in Intel server processor average selling price has been driven customers choosing to richen mix, while Intel has consistently offered steady performance improvements on its products at all the lower price points while adding to its choices of products...