Intel Corp (INTC)

[Unkwn]

If Intel wins Apple business for both modems & A10 manufacturing, and Optane launches well (and it looks like it will) - $50 within a year is possible, even probable.

A10 manufacturing (for what it would do to the entire foundry space) and 3DXP (Storage class memory) are likely to be huge inflection points for the industry as a whole.

The question is: What would an A10 design win do to Intel's earnings? Intel is not particularly said to have the lowest production costs (though, it actually is an unknown). Apple, on the other hand, is not really known to be soft on pricing, at least when it comes to their suppliers.

There is one scenario that makes a lot of sense to me, though, which would also leave an opportunity for Intel to actually make money with an Apple deal: Integrating its own modem IP into a fully integrated Apple-SoC. That would benefit Apple's cost position through tighter integration and give Intel an edge, since I doubt Qualcomm would let Apple integrate its modem IP (rather, they'd prefer to sell them their own SoCs). Apple may use such a deal to put higher pressure on Qualcomm.

There are many things that make me doubt, though: Intel failed big time so far integrating its modem into its own SoCs, so I don't see why this, all of a sudden, shouldn't be a problem with Apple SoCs and certainly Apple will see the risk here. In addition, such a move would harm TSMC significantly, which is not in Apple's interest. To leave Intel and Samsung as the only competitive foundries in the market is not what Apple wants, for sure. Also, since Intel failed so hard at even fabbing for its own subsidiary, Altera, there's also a lot of doubt about Intel being mature for such a deal - again, Apple will see that risk.

There is probably a scenario which is more likely: Intel helping Apple to integrate its modem IP and Apple fabs at TSMC (and partially at Intel/Samsung maybe). This won't be a deal which would increase Intel's earnings significantly, though. It just would help Intel to reduce costs, which isn't the 50$ mover, but at least better than nothing.

From 3D Xpoint, we'll have to see what products really offer as a benefit and, most crucial of all, what the costs are, attached to it. Impossible to forecast in my opinion, but it's a chance. Could be anything, from huge earnings contributer, if Intel manages to bring costs down to 3D NAND level, to basically zero earnings contribution (due to production/development costs), if it remains some niche cache application for servers.

Regarding the current price move, I feel that those are mainly driven by channel insider checks. In the past, you could easily see that this is what drives Intel's share price early and the big guys seem to be really good at it. Maybe it is a better than expected development in the PC market, still Intel's bread and butter. Consumers need to spend their money somewhere and since it isn't smartphones and tablets anymore, it could be more PCs. Windows is still dragging the market, though.