The reason to be long the stock is a cyclical uptick in PC demand. We're seeing a better than expected enterprise upgrade cycle now due to the Window XP upgrade dynamics. The consumer is still weak. Brian K. referred to the consumer segment as "challenging".
The long term secular trends are not in Intel's favor. Once it is apparent that the cycle is ending, I will look to take profits.
Here are the secular headwinds:
1) Compute is shifting to Mobile where value is perceived not just on CPU performance but time-to-market, modem, camera, multimedia and so on. These are all areas where Intel continues to struggle.
2) A loss of pricing power as the mix shifts to low-end tablet computing. Evidence of this can be seen in emerging markets where PC units are still plummeting as tablets cannibalize. There is no fundamental reason for an x86 premium as mobile ecosystems begin to offer credible alternative computing platforms. I look for Apple to take the lead here with the rest of the industry following.
3) The "converged core" strategy, by definition, allows ARM to attack parts of the market where Intel doesn't play. This is especially risky in the server market.
4) Good-enough computing is currently stalling the upgrade cycle. However, a more dire consequence is a loss of pricing power as competitors can offer 'good-enough' at much lower prices while innovating on other vectors where Intel is weak *see #1".
5) Moore's law will stall out after 10nm due to economic forces (down-to-flat unit growth on PCs isn't going to cut it). I'm skeptical IoT and the other non-CPU markets that Intel wants to win in order to fill the fabs.
