Intel Corp (INTC)

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(1) Looks like Paul Otellini was dragging his feet hoping that the Tablet fad would run out. Since it continued for much longer, BK had no choice but to jump in with both feet investing rather heavily. This is a case of damned if you do, damned if you don't. I think BK's approach though expensive, was pragmatic. With ongoing cuts and recent pull back from mobile, savings may be significant.

Savings, IMO, are already baked in. They have told us how much they're trimming opex by in this restructuring so "savings from mobile" isn't something that's an "unknown" that could surprise investors. It's baked into analyst estimates.

The normal cyclical upswing from June/July till Nov/Dec for Intel should start any time now. There is not much of a down side for Intel with any increase in Fed rates (June?).

I don't think that's really predictable. Everyone is already expecting Intel to hit its normal seasonality, and Intel has already put out its full-year guidance, so unless Intel does way better than expected, this isn't really a potential catalyst.

High likelihood of Apple modem business win. This might propel wins from other smartphone vendors (Xiaomi, Huawei, ZTE, LG, Motorola, etc. Not sure about Samsung since they are fabbing for QCOM).

I think the Apple modem win is mostly (though not fully) baked in. That said, I don't think you can extrapolate other wins from this. Intel is now only selling standalone modems and the market for standalone modems, outside of Apple, is very, very small.

The rest of the industry uses applications processors with modems built in. Apple win doesn't imply any other further opportunity especially since Intel is no longer investing in phone-targeted APs.

Memory/Storage - 3D NAND, Optane, and 3DXP in DIMM. There is going to be a significant jump in Intel's memory business, I see no other reason for Intel to break out the memory business from Q1 2016.

Yeah, commodity NAND...look at Micron's enterprise value -- approximately $18 billion. That is what the market values Micron's entire memory business at, including DRAM, NAND, HMC, etc. Intel's memory business isn't realistically ever going to be as valuable, let alone more valuable, than Micron's.

$18 billion divided by ~5 billion shares, means that a Micron-level memory business could add a whopping $3.6/share in value. A half-as-successful business would maybe add $1.80.

Don't count on the memory business driving any material upside.