Not everyone is delighted. Stacy Rasgon of Bernstein Research, who has an Underperform rating on the shares, raised his target to $22 from $18, but writes that it “may not be surprising to see what appears to be a spike in corporate PC demand” given the end of life in April of Windows XP.
“However, the big question now will of course be one of sustainability – while the company’s guidance suggests the spike in demand will carry forward through the rest of the year, it would not be out of line to suspect a bit of pull-forward, with associated risk of an air pocket later in the year.”
I'll at least say that such a bear thesis isn't outrageous or inconsistent. He believes demand for PC's is trending down, but a one-time factor like the end of life for Windows XP has resulted in a temporary blip in demand.
Then again, when I think of strong downward and strong upward forces, I usually don't see them resulting in a net strong upward force. In other words, if demand for PC's were still trending lower, could an uptick resulting from a Windows refresh be enough for Intel to guide upwards by more than 5%?
Seems more like PC demand has stabilized - and IN ADDITION to that - there is a temporary uptick in business demand. Much easier to believe this, than to believe that the PC market is in a double-digit secular decline, but somehow a business PC refresh pushed it >15% in the upwards direction.
I would have expected corporate customers to have upgraded either last summer or by the end of 2013. Corporate-wide upgrades take time and planning and you don't wait until the last minute to do that.