Can Intel’s Revenue Cross The $75 Billion Mark By 2021?

Intel’s (NASDAQ: INTC) total revenue has grown from $62.8 billion in 2017 to $71.9 billion in 2019, largely driven by a $4.4 billion growth in data center revenue, and is expected to rise further to $75.8 billion by 2021. Total revenue is expected to rise by around $3.9 billion over the next 2 years, driven by even growth across all segments.
We expect total revenue to rise to $75.8 billion by 2021, on the back of stronger demand for IoT (Internet of Things) systems, and Intel’s new 10nm chips.
The $3.9 billion growth in total revenue is expected to be driven by roughly equal growth in all segments, with Internet of Things expected to see the highest percentage growth (~25%).

Takeaway:

• Intel’s Client Computing division, which sells processors and platform products, is expected to contribute $37.9 billion to total revenue in 2020, making up 51% of Intel’s $74.2 billion revenue estimate.
• The Client Computing division, is more than 1.5x larger than the Data Center division, which is expected to bring in $24 billion in 2020, making up 32% of the total revenue estimate.
• Intel’s Data Center division will bring in an additional $5.3 billion, which is 41% of the $13 billion in total revenue that the company is expected to add between 2017 and 2021.
• This strong expected revenue growth has been key to Intel’s ~45% price appreciation over the past year, further helped by growing margins and a steady drop in shares outstanding.
• In our interactive dashboard Intel Revenue: How Does Intel Make Money?, we discuss Intel’s business model, followed by sections that review past performance and 2021 expectations for Intel’s revenue.

A look at Intel’s segments and their contribution to total revenue

(A) Client Computing revenue to grow by $1.1 billion by 2021, making up around 50% of the total revenue estimate

• Client computing revenue has grown from $34 billion in 2017 to $37.1 billion in 2019, on the back of a steady growth in selling prices, and a growth in demand from emerging markets.
• We expect revenue from this segment to grow to around $38.2 billion by 2021.

(B) Data Center revenue to rise by $900 million over the next 2 years, to make up 32% of 2021’s total revenue estimate

• This segment includes revenue from sales of processors and chipsets designed for the enterprise, cloud, communications infrastructure, and technical computing segments.
• Revenue from this segment has grown from $19.1 billion in 2017 to $23.5 billion in 2019, driven by the expansion of cloud infrastructure and communications provider companies.
• However, we expect growth to slow down, taking revenue to $24.4 billion by 2021.

(C) Internet of things revenue to add around $1.2 billion over the next 2 years, making up 8% of 2021’s total revenue estimate

• Revenue from this segment has grown from $3.2 billion in 2017 to $4.7 billion in 2019, on the back of growing demand for embedded systems across multiple sectors.
• We expect this metric to rise further to $5.9 billion by 2021, on the back of steady demand for IOT systems.

(D) Other revenue to grow by $700 million over the next 2 years to make up around 10% of the total revenue estimate for 2021

• Other Revenue includes revenue from software products for endpoint security, network and content security, risk and compliance, and software products and services that promote Intel architecture as the platform of choice for software development.
• Revenue from this segment has gone from $6.5 billion in 2017 to $6.6 billion in 2019.
• We expect this metric to grow steadily to around $7.3 billion by 2021.

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