Small Upside to Intel’s Stock from Higher Atom Market Share
Intel (NASDAQ:INTC) manufactures ultra low voltage microprocessors under the brand name, Atom, that are used for powering netbooks and other mobile internet devices (MIDs). In this segment, Intel primarily competes with AMD (NYSE:AMD), nVIDIA (NASDAQ:NVDA), Qualcomm (NASDAQ:QCOM), and Micron Technology (NASDAQ:MU). We currently have a Trefis price estimate of $24.78 for Intel’s stock, about 15% above the current market price of $21.51.
Trefis members have created forecasts for two key drivers of Intel’s stock over the last week: (1) Atom’s market share and (2) Total available market size for Atom. The member forecasts suggest that Atom’s market share and Total available market size for Atom will trend above the Trefis forecast. These projections suggest a combined upside of about 2% for Intel’s stock.
Atom microprocessor accounts for only 2% of the $25 Trefis price estimate for Intel’s stock. Hence we believe that Intel’s stock is not much impacted by (1) Atom’s market share and (2) Total available market size for Atom. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.
The average of forecasts for Atom’s market share created by Trefis members indicated a projected increase from 14.4% in 2010 to 23.5% by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from 13.5% in 2010 to 20.5% by the end of the Trefis forecast period. The member estimates imply an upside of 1% to the Trefis price estimate for Intel’s stock. In the past, Atom’s market share has increased from 7.6% in 2008 to 13.1% in 2009.
You can drag the forecast trend-line above to express your own view, and see the sensitivity of Intel’s stock to Atom’s market share.
Our complete analysis for Atom’s market share is here.
2. Total available market size for Atom
The Total available market size for Atom includes devices like netbooks, smartphones, tablets, smart TVs (e.g. Google TV) and car infotainment systems. The average of forecasts for Total available market size for Atom created by Trefis members indicated a projected increase from 306 million in 2010 to 974 million by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from 270 million in 2010 to 837 million by the end of the Trefis forecast period. The member estimates imply an upside of 1% to the Trefis price estimate for Intel’s stock. In the past, Total available market size for Atom has increased from 150 million in 2008 to 200 million in 2009.
You can drag the forecast trend-line above to express your own view, and see the sensitivity of Intel’s stock to Total available market size for Atom.