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									                                                                                                         Company Report
                                                                                                                   Semiconductors
 April 26, 2010 | 20 Pages



 INTEL CORPORATION (NNM: INTC)                                                                                 RATING: BUY
 2010 YEAR OF SERVERS, MARKET SHARE GAINS, INITIATE                                           Fiscal Year Ends Dec
 BUY, PT$28
       2010 will be the year of an enterprise server rebound, in our        Rating:                                            Buy
       view, with Server unit shipment momentum picking up into             Price:                                          $23.82
       2H10. INTC has almost 70% share of the Server market. Servers        Price Target:                                      $28
       should pick up seasonally after the March quarter providing gross    52-wk Range:                              $15.00-$24.37
       margin tailwinds. Also the PC Computing Segment continues to         Market Capitalization (M):                    $131,920
       be strong in 2010 with the potential of a corporate. March quarter   Shares Outstanding (M):                          5,681
       PC unit shipments were better than seasonal at down 5% q/q           Avg. Daily Vol. (000):                          63,912
       versus seasonally down 10-15% q/q and the trend should improve       Dividend Yield:                                   2.6%
       into 2H10 driven by Win7 and a potential corporate PC refresh.       Debt/Total cap:                                     NA
       Intel Continues to be almost 12 months ahead of the competition      EPS Growth Rate:                                 10.0%
       on the technology roadmap with a majority of processors now          L-T Organic Revenue Growth:                      15.0%
       shipping at 32nm and pushing 24nm by 4Q10. We should note            Short Interest:                                   5.0%
       that AMD (AMD, $9.97, Not Rated) recently pushed out its 32nm
                                                                            Tangible Book Value:                             $6.77
       to 1Q11E, with competitor NVDA’s (NVDA, $16.60, Neutral)
       graphics chips at 40nm.
                                                                            Vijay Rakesh
       Intel continues to present an attractive valuation and strong        (312) 525-8431
       cash flow. Consensus EPS is now approaching $1.90 versus our         vrakesh@sterneagee.com
       estimate of $1.97 for ‘10E, $2.48 in net cash per share and a 2.6%
       dividend yield. We believe INTC continues to present solid and
       attractive fundamentals. We are therefore initiating INTC with a
       Buy rating and a $28 PT, approximately 14x C10E of $1.97.




                                                     Earnings Summary
FYE Dec                           2009A                           2010A                                 2011E
Sales:                          35,127.0                        43,249.0                              46,500.0
Prior Sales:                           --                              --                                    --

                                                    EPS & P/E Summary
                                  2009A     2009 Previous        2010A 2010 Previous                     2011E      2011 Previous
EPS:           Q1                  $0.11                --        $0.43            --                     $0.48                 --
               Q2                  $0.18                --        $0.44            --                     $0.44                 --
               Q3                  $0.33                --        $0.52            --                     $0.49                 --
               Q4                  $0.40                --        $0.58            --                     $0.63                 --
               Full Year           $1.03                --        $1.97            --                     $2.05                 --
P/E Ratio:                             --               --            --           --                         --                --




   Important Disclosures regarding Price Target Risks, Valuation Methodology, Regulation Analyst Certification,
Investment Banking, Ratings Definitions, and potential conflicts of interest begin on Page I of the Appendix Section.
             800 Shades Creek Parkway           Suite 700         Birmingham, AL 35209                   205-949-3500
                                  Sterne, Agee & Leach Inc. is Member NYSE, FINRA, SIPC
INTEL CORPORATION (NNM: INTC)                                                                 April 26, 2010

We are initiating coverage of Intel Corporation (INTC) with a Buy rating and $28 price
target, based on 14x our 2010 EPS estimate of $1.97. We believe 2010 is the year of
Server, with unit server shipments expected to pick up into the June quarter and 2H10
and should provide tailwinds. Also improving fab utilizations, a corporate PC refresh,
and improving consumer demand point to improving gross margins for Intel. We believe
that Intel will grow or maintain market share in the server, desktop, and notebook
markets relative to Advanced Micro Devices (AMD), given financial and technology
advantages, especially with AMD’s 32nm chipset now pushed out to 2011.

Investment Thesis - Key Points:
We believe 2010 will be the year of an enterprise server rebound, with Server unit
shipment momentum picking up into 2H10. INTC has almost 70% share of the Server
market. Server Unit shipments fell 19% Y/Y in 2009 according to IDC, but we believe
could rebound 15% Y/Y in 2010. Servers, which account for about 15% of INTC’s
revenues, are a high-margin segment, and while seasonally weak in the March quarter
should pick up momentum into the June quarter and 2H10.

After a rebound in 2009 driven primarily by the consumer, we believe the PC
Computing Segment continues to be strong in 2010 with the potential of a corporate
refresh and a PC market that we believe could grow 10-15% Y/Y. March quarter PC
unit shipments were better than seasonal at down 5% q/q versus seasonally down 10-15%
q/q. We believe PC momentum should continue to improve into 2H10 and provide
further tailwinds for INTC especially with a potential corporate PC refresh driven by
Windows 7 Ramp. Intel has maintained processor pricing through 1Q10 with little to no
price declines across its processor family given strong PC demand, low channel inventory
and processor shortages.

Intel is also ramping its new family of integrated SoCs, the Arrandale, Pinetrail and
Clarksdale, which should provide Processor market share gains through 2010. We
believe shipments of the GPU-integrated SoCs especially Arrandale could grow 100%
q/q into the June quarter with Notebook attach rates going from 20% exiting the March
quarter to 40% exiting the June quarter. Increasing attach rates q/q at the mid and low end
Notebook segments could enable further market share gains, as OEMs reduce the total
BOM cost with integrated GPU SoCs.

Intel Continues to be almost 12 months ahead of the competition on the technology
roadmap with a majority of processors now shipping at 32nm and pushing 24nm by
4Q10. We should note that AMD recently pushed out its 32nm to 1Q11E, with
competitor NVDA’s graphics chips at 40nm. We believe Intel is building itself a
substantial technology and cost lead over the competition.

Intel continues to present an attractive valuation and strong cash flow. With gross
margins continuing to improve from 63% in 1Q (Mar) to 64% in 2Q (Jun), a 5-year high,
consensus EPS now approaching $1.90 versus our estimate of $1.97 for ‘10E, $2.48 in
net cash per share and a 2.6% dividend yield, INTC continues to present solid and
attractive fundamentals, we believe. We are therefore initiating coverage of INTC with a
Buy and a $28 PT, approximately 14x C10E of $1.97. INTC has traded between 10x and
32x forward EPS in the last 5 years. Also with much of the AMD ITC litigation payments
behind, Capex mostly flat Y/Y, and operating margins at 30%+, Intel is generating
significant free cash flow.

Risks: Longer term, PC represents a mature market and headwinds in the Server
segment with virtualization imply the need for diversification into adjacent growth
markets. Nevertheless the PC market is overall a mature market and Intel is continuing
to diversify into adjacent markets with the Moorestown platform potentially into
handsets. Also Atom continues to open up new automotive, industrial, consumer and
medical markets for Intel.



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INTEL CORPORATION (NNM: INTC)                                                                  April 26, 2010

Company Background:
Intel is the largest semiconductor company in the world based on revenues, was
incorporated in California in 1968 and became a publicly traded company in 1971.
Headquartered in Santa Clara, California, Intel employs approximately 79,000 people
worldwide. The semiconductor market totaled $228B in 2009 revenues, with Intel
accounting for $35.1B of industry revenues. Samsung and Toshiba are #2 and #3, in
terms of market share, with both focusing more on storage and memory.

Industry Pioneer – Strong Technology and Market Share Lead
In the 1990s, INTC followed a strategy of diversifying out of the PC business and buying
up communications companies such as DSP Communications, Level One, and Giga A/S,
many of which went through sizable write-downs. More recently, Intel has focused on
developing technologies internally (most specifically 32nm) to capture market share
rather than via acquisition. Recent acquisitions have tended to be more strategic in nature,
including 2009’s acquisition of embedded software vendor Wind River Systems,
allowing Intel to increase its presence in the non-PC space.

Nehalem-EX Server Silicon Should Help Market Share Gains versus AMD: Intel’s
Nehalem-EX server silicon, which was introduced in March, should close the technology
gap with AMD as Nehalem-EX’s eight-core per processor capabilities will be able to
more effectively address the growing need for virtualization capabilities within the
enterprise environment and in turn, increase presence in the high-end server market. Intel
currently has almost 70% share of the Server market.

Leading-Edge Manufacturing Capability, Increasing Footprint In Cloud
Computing And Virtualization: In addition to maintaining an almost 12-month lead in
32nm production on AMD (AMD will start 32nm production in 1Q11), Intel
management has also identified cloud computing and virtualization as additional key
drivers of enterprise spending. Following a slowdown in consumer and enterprise
spending in 2008-09, Gartner estimates global IT spending expected to grow over 5% in
2010, fueled in particular by consumer mobile PCs, virtualization and security software.
For 2011, IT spending is expected to grow an additional 4% Y/Y to $3.5T.

Atom Opening up new Automotive, Consumer, Industrial Markets: Intel introduced
the Atom in 2008 to profitably compete with AMD in the low-end, sub-$300 price
segment of the PC market, a segment that Intel had ignored in the past. But with the
Netbook market slowing down, Intel is focusing on adjacent markets with the Atom now
having almost 700 new design wins and in adjacent Automotive, Industrial, Consumer
and Medical markets.

Ramp of integrated GPU SoCs should be a tailwind to Market Share Gains in Low
and Mid End PC Market: According to Jon Peddie Research, Intel maintained a 55%
share of the overall graphics market at year-end 2009. However, Intel’s share lead over
nearest competitors Nvidia and AMD has been a by-product of its integrated capability
within its microprocessor product line. The launch of the new integrated graphics
Arrandale-Clarksdale family should be a tailwind as Notebooks OEMs try to reduce
BOM (Bill of Materials) costs.


Products and End Markets: Intel Offers Products In A Broad Range Of Categories:
   • Microprocessors with two or more processor cores, designed for desktops,
       workstations, servers, notebook, netbooks, embedded applications,
       communications products, consumer electronics and handhelds;

    •    Chipsets designed for desktops, workstations, servers, notebook, netbooks,
         embedded applications, communications products, consumer electronics and
         handhelds;

    •    Motherboard products designed for desktop, workstation, and server platforms;

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INTEL CORPORATION (NNM: INTC)                                                                April 26, 2010



    •   Wired and wireless Internet connectivity products, including network adapters
        and embedded wireless cards, other communications infrastructure products—
        including network processors, communications boards that are basic building
        blocks for modular communications platforms;

    •   NAND flash memory products with its joint venture (49% Intel stake) with
        Micron (MU, $10.97, Not Rated); IMFT (IM Flash Technologies) is primarily
        used in digital audio players, memory cards, and solid-state drives;

    •   Networked storage products that allow storage resources to be added to either
        Ethernet or Fiber Channel; and software products and services.



2010 Year of Servers for Intel:

The Server market is expected to show the strongest rebound in 2010 in the past 5 years
given that enterprise spending froze in 2009. With IT budgets opening up, Server unit
shipments are expected to grow 15% Y/Y versus 2009 server unit shipments down 19%
Y/Y.




Source: Sterne Agee & Leach, Inc. Research Estimates

Also while Intel reported a solid F1Q10 (Mar) quarter, we believe key Servers tend to be
seasonally weaker in March as shown above with 2Q (Jun) Server industry shipments
growing 5% seasonally. We believe improving server seasonality into the June quarter as
shown above should be another tailwind to core Intel gross margins. Our checks indicate
Server shipments could grow 10-15% q/q into the June quarter from depressed levels.
Below is the snapshot of Intel’s server roadmap. We believe the current Nehalem and
Nehalem-EX can replace 6-9 single core servers and lower energy and operating costs
80-90% depending on Server utilization. At the same time as boosting server utilization,
the new Nehalem family can significantly reduce floor space. Below is a chart showing
the increasing trend in operating costs with maintaining servers, especially energy costs.




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INTEL CORPORATION (NNM: INTC)                                                                April 26, 2010




Source: Company Reports

Microprocessors: The microprocessor is the central processing unit (CPU), the brain of
a computer, and processes system data and controls other devices in the system. Today’s
microprocessors are moving toward multi-core platforms as they enable multitasking and
more energy-efficient distributed processing. Microprocessors can also be 32-bit or 64-bit
architecture, which is the largest size of numerical data that the microprocessor can
handle. Most of Intel’s microprocessors are manufactured using 45-nanometer (nm) Hi-k
metal gate silicon process technology (45nm process technology) or 32nm second-
generation Hi-k metal gate silicon process technology (32nm process technology).



PC & Server Market Estimates:




Chipsets: The chipset primarily consisting of the key Northbridge and Southbridge
chipset (as shown below) is the PC’s nervous system and manages data transmission
between the microprocessor, display, attached storage devices, etc.




                                                                                                  Page 5
INTEL CORPORATION (NNM: INTC)                                                                April 26, 2010

Motherboard & Chipset Block Diagram




Source: Company reports, Sterne Agee Research



Integrated Graphics SoCs with Core i3-i5-i7 or the Pinetrail-Arrandale-Clarksdale
Family the next Step in Growth: The Tick-Tock Regime is Intel’s model of sustaining
microprocessor      leadership     by    introducing      the   next-generation    shrink
compaction/derivative within two years, as shown below. Tick-Tock is INTC’s
philosophy of introducing a new architecture (32-bit, 64-bit iA, etc.) every two years for
mobile, notebook, or Desktop. The newest family of products on this roadmap is the Core
i3-i5-i7 family of processors with graphics integrated as SoCs.




                                                                                                  Page 6
INTEL CORPORATION (NNM: INTC)                                                                April 26, 2010




Source: Company Reports


The 32nm Lead: Intel is currently ramping 32nm production with 32nm chipsets almost
30-40% of shipments. Beginning in the second half of 2009, Intel began production at its
32nm node. With the rollout of its Nehalem-EX chipset at the 32nm node, management
anticipates ramping production at the 32nm level as fast as possible. Expectations are for
45nm production to decline to 60% of total production by 3Q10 and 40% by year end.
Consequently, 32nm should make up 30% of output by the end of September and we
believe closer to 40-50% by the end of 2010.

Intel Tick-Tock Philosophy In Action




Source: Company reports

Intel divides its revenues into three key segments including the PC Client Group (PCCG),
Data Center Group (DCG), and Other Intel Architecture (Other IA).

PC Client Group: The PCCG includes MPUs and chipsets designed for the notebook,
netbook, and desktop market segments, in addition to motherboards for the desktop
segment and wireless connectivity products. PCCG was 74% of 1Q10 revenues. Broken
                                                                                                  Page 7
INTEL CORPORATION (NNM: INTC)                                                                 April 26, 2010

out within the group, microprocessor revenues were 57% of total sales while chipset sales
were 17%. Prominent products within the PCCG include Intel’s Core i3/5/7 mobile
processors and Core2 Extreme/Quad/Duo processors as well as the Atom and Pentium
processor lines.

Data Center Group: The DCG offers products that are incorporated into servers,
storage, workstations, and other products that help make up the infrastructure for data
center and cloud computing environments. DCG’s products include microprocessors and
related chipsets, motherboards and wired connectivity devices. In the first quarter, sales
into this segment totaled $1.9B, or 18% of company revenues. MPU sales made up 15%
of these revenues while DCG chipsets accounted for 3% of sales. Current server,
workstation, and storage microprocessor offerings include the Nehalem-EX processor
and Xeon and Itanium processors.

Other Intel Architecture: Finally, Intel’s Other IA segment accounted for nearly 4% of
1Q revenues. The Embedded and Communications Group (ECG) makes up a significant
portion of this group’s sales and includes Atom processors and chipsets for a growing
number of embedded applications across numerous market segments, including
industrial, medical, and in-vehicle infotainment.

Competition:

Microprocessors: Intel faces competition from both microprocessor suppliers and
competing architectures. The key microprocessor suppliers are AMD (AMD, $9.97, Not
Rated) and Via in the desktop and mobile segments. In the Enterprise segment, the
competitors are AMD, IBM (IBM, $130.73, Not Rated) and Oracle (ORCL, $26.47, Not
Rated), following its acquisition of Sun Microsystems in January. Intel also faces
competition from competing architectures from Sony, IBM, and Toshiba jointly
developing Cell Architecture, IBM Power 7 Architecture, ARM Holdings (ARMH, Not
Rated) and Oracle-SUN with its scalable processor architecture (SPARC).

Chipsets: The key competitors in the segment are AMD, Via, Silicon Integrated Systems
(SIS) and NVIDIA.

NAND Flash: Key competitors are Hynix(00660.KS, 28500, Not Rated), Samsung
(059030.Ks, 834,000, Not Rated), SanDisk (SNDK, $43.52, Not Rated), Micron (MU,
$10.97, Not Rated) and Toshiba Corporation (6502.TSE, Not Rated).

Connectivity (WiFi/WiMax): Intel competes with Atheros(ATHR, $42.39, Not Rated),
Broadcom (BRCM, $36.11, Not Rated), and QUALCOMM(QCOM, $38.11, Not Rated).

The following is a breakout of primary competitors to Intel, based on product segment
within MPUs:

Notebook: AMD, VIA
Netbook: AMD, NVIDIA, Qualcomm, VIA
Desktop: AMD, VIA
Server/Workstation: AMD, IBM, Oracle
Embedded: AMD, Freescale, Texas Instruments
Handheld: Qualcomm

Intel has, for years, been trying to diversify out of PCs, but with no market as profitable
as the core PC franchise, it has been an uphill task. So, most prior excursions into
communications, wireless, and the TV space have proved to be just that. We believe the
recent development in the low-cost PC market and the mobile device market focus should
be more successful as they complement Intel’s core expertise in the PC market.




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INTEL CORPORATION (NNM: INTC)                                                                April 26, 2010

Intel Atom Processor Applications




Source: Company reports


Notebook And Desktop Market Share Trends




Manufacturing:
Intel has a broad worldwide manufacturing base. About 64% of its manufacturing output
is generated in the U.S., while 36% is in Israel and Ireland. The chart below shows key
manufacturing facilities. Intel is also building a new wafer fabrication facility in China
that it expects will begin production in late 2010/early 2011.




                                                                                                  Page 9
INTEL CORPORATION (NNM: INTC)                                                                April 26, 2010

Intel Fabrication Plants




In 2008, Intel divested its NOR flash operations in exchange for a 45% ownership
interest in Numonyx. Intel is leasing a wafer fabrication facility located in Israel to
Numonyx. In 2010, Micron announced it is buying all of Numonyx with the acquisition
expected to close in the June or September 2010 quarter.

Sales And Marketing: Intel sells its products primarily to original equipment
manufacturers (OEMs) and original design manufacturers (ODMs). ODMs provide
design and/or manufacturing services to branded and unbranded private-label resellers. In
addition, Intel sells products to other manufacturers, including makers of a wide range of
industrial and communications equipment. Customers also include PC and network
communications products to users who buy PC components and other products through
distributor, reseller, retail, and OEM channels throughout the world. The worldwide
reseller sales channel consists of thousands of indirect customers and systems builders
that purchase Intel microprocessors and other products from distributors. In 2009,
Hewlett-Packard (HPQ, $54.26, Not Rated) accounted for 21% of net revenue (20% in
2008 and 17% in 2007) and Dell (DELL, $17.02, Not Rated) accounted for 17% of net
revenue (18% in 2008 and 2007).

In 1Q10, more than 80% of sales were outside North and South America, with Asia-
Pacific being 57%, Europe 14%, and Japan 11%. There is a definite seasonal pattern to
sales with PC sales significantly higher in 2H because of back-to-school and holiday
sales and consumer/business buying patterns.




                                                                                                  Page 10
INTEL CORPORATION (NNM: INTC)                                                                  April 26, 2010

Management:
Paul Otellini, President & CEO: Paul Otellini became Chief Executive Officer in 2005.
He had previously served as Intel's president and Chief Operating Officer from 2002 to
2005. From 1998 to 2002, he was Executive Vice President and general manager of the
Intel Architecture Group, responsible for the company's microprocessor and chipset
businesses and strategies for desktop, mobile, and enterprise computing. Prior to this role,
Mr. Otellini was general manager of the Microprocessor Products Group. Mr. Otellini
joined Intel in 1974.

Stacy Smith, Senior Vice President and Chief Financial Officer: Stacy Smith joined
Intel in 1988 and has held positions in finance, sales and marketing, and information
technology. In March 2006, Mr. Smith was appointed assistant chief financial officer and
was promoted to CFO in late 2007. His prior roles at Intel include chief information
officer for the Information Technology Group and GM of Intel Europe, Middle East, and
Africa (EMEA) product sales. Mr. Smith became vice president of sales and marketing in
2002.

Andy D. Bryant, Executive Vice President and Chief Administrative Officer: Andy
Bryant oversees the technology, manufacturing and enterprise functions and activities for
Intel. Prior to assuming his current role in December 2007, he was Chief Financial
Officer for Intel for 13 years. Mr. Bryant joined Intel in 1981 as controller for the
Commercial Memory Systems operation and in 1983 became Systems Group controller.
In 1987, he was promoted to director of finance for the company, and was appointed vice
president and director of finance of the Intel Products Group in 1990. Prior to joining
Intel, Mr. Bryant held positions in finance at Ford Motor Company (F, $14.46, Not
Rated) and Chrysler Corporation.

Sean Maloney, EVP and GM, Intel Architecture Group: Sean Maloney took over the
position in 2009. Mr. Maloney is a 26-year veteran of Intel. He began his Intel career in
Europe, where he spent nine years, first as Intel UK's manager of applications
engineering, then as country manager of Intel UK, and director of marketing for Intel
Europe. From 1992 to 1995, Mr. Maloney served as technical assistant to the chairman
and chief executive, Mr. Andy Grove. From 1995 to 1998, Mr. Maloney was head of
Intel's sales and marketing activities in the Asia Pacific region. In 1998, he became head
of the company's worldwide sales organization. He was promoted to SVP in 1999 and
EVP in 2001. He took over as head of Intel Communications Group (ICG) in 2004. In
July 2006, Mr. Maloney was appointed chief sales & marketing officer.


Key Topline Seasonality:
Intel tends to have a strong seasonality, with positive up-trends into the 2H because of
consumer and enterprise PC/Server buying patterns. Q1 and Q2 are typically sequentially
down quarters because of softer buying patterns after a strong holiday season with a
strong rebound into calendar 2H. With almost 15-20% of the worldwide semiconductor
market and more than 75% share of the microprocessor logic market, Intel is also
affected by global macroeconomic trends.

Valuation
Intel reported 1Q10 revenues/EPS of $10.3B/$0.43 versus the Street at $9.8B/$0.38.
Revenues were down only 3% q/q versus a seasonal (10-15%) q/q for the March quarter.
Demand in the quarter was very strong with PC Computing market strength and ramp of
new Intel Nehalem Server platforms. Y/Y Intel’s revenues are up 44% showing the
strength of the PC rebound.

Microprocessor ASPs in the quarter were flat Q/Q, while overall ASPs increased q/q with
ramp of high-margin high-ASP Nehalem platforms. Gross margins in 1Q10 at 63.4%
were significantly better than consensus of 61.3%. Gross margins were down only 1.3%
from 4Q09 as new Notebook processors and Server platforms ramped and mix shifted
away from Netbooks. Intel Netbook Atom revenues were down 19% q/q post the strong
4Q09 and as core Notebook platforms ramped. INTC is also noting supply chain and
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INTEL CORPORATION (NNM: INTC)                                                                 April 26, 2010

ODM inventory at normal levels exiting the March quarter. Dollar Inventory on the
books went up by $51M, but with ASPs going up, we believe unit inventories were down
q/q even as new Notebook and Server platforms ramped a positive for 2Q10 (Jun).

Intel guided 2Q10 revenues essentially almost flat at $10.2B +/- $400M, gross margins at
64% and operating expenses essentially flat q/q. Raising 2010E full-year gross margin
outlook from prior 61% +/- 3% to 64% +/- 2%, a very significant raise. Intel did not
change full-year Capex at $4.8B.

Intel gross margins in the last 10 years have averaged between 55% and 56% and hit a
bottom of 54.3% in 2001. Given a fool-proof Tick-Tock strategy and poor execution
from peers, especially with the AMD 32nm now pushed out to 1Q11E, we believe Intel
should successfully outperform on margins. While AMD could come back into the
picture in late 2010 with its 32nm lineup, we believe INTC could introduce 24nm
products in late 2010. Near term we believe with Intel’s Server Nehalem and Nehalem-
EX ramping, INTC could regain some server market share. Also ramp of integrated
graphics SoCs Arrandale-Clarksdale should result in incremental share gains for INTC.

Another market that Intel has focused on is WiMax. While much has been said about it,
the initial debut of Clearwire (CLWR, $7.83, Not Rated) and the interests of Sprint, we
believe this will be a long-term strategy for Intel in the mobility/notebook segment. As of
December 2007, INTC also had 22% ownership of CLWR. INTC in 2008 announced an
investment in Clearwire, along with Google (GOOG, $531.64, Not Rated),
Comcast(CMCSA, $19.08, Not Rated), and Time Warner (TWX, $33.51, Not Rated).
With WiMax broadband significantly faster than 3G networks today, we believe the
investments pave the way to development of the next 4G networks with Sprint (S, $4.23,
Not Rated).

Estimates: Our 2010 revenues/EPS estimates for Intel are $43.25B/$1.97 versus the
Street consensus at $42.67B/$1.83. Our 2011 revenues/EPS estimates are $46.5B/$2.05
versus the Street consensus at $45.1B/$1.97. INTC shares trade at 12x our 2010 EPS
estimate of $1.97, with $2.48 in net cash/share and a 2.6% dividend yield.

We are initiating coverage of Intel Corporation (NASDAQ: INTC) with a Buy rating and
$28 price target. We apply a 14x P/E multiple to our 2010 EPS estimate of $1.97, well
within the shares’ five-year historical range of between 10x and 32x forward P/E, a
conservative multiple to derive our price target. Intel continues to execute well, with
production now at 32nm, new integrated graphic SoC and Nehalem Server ramping and
tailwinds from the PC-Server markets. With the next generation 24nm coming out in
4Q10 almost 12months ahead of the competition, INTC should maintain the cost and
technology lead.

RISKS TO PRICE TARGET
Intel competes in a cyclical, technologically intensive, price-competitive business. The
company’s ability to meet our financial expectations and achieve future growth is subject
to a number of risk factors, including, but not limited to, the following risks.


Market Risks Include:

Macroeconomic risk in the PC and Desktop market with weak consumer spending in the
U.S;

Adoption of Intel’s integrated graphics platforms Arrandale-Pinetrail-Clarksdale family
into PCs;

Continued success in INTC’s research and development efforts and timely introduction
and execution of its new products at 24nm and into the graphics/server markets;


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INTEL CORPORATION (NNM: INTC)                                                                 April 26, 2010

Very capital-intensive operations, particularly in regard to 32nm; but on the flip side, it
has set a very high entry barrier;

Continued dependence on the PC franchise;

Lower margins in new and emerging markets such as low-cost PC, Mobile Internet
device markets; and emerging geographies;

High exposure to Asia and discretionary consumer spending; and

Unexpected changes in legal and regulatory requirements, tariffs and exchange rates,
political and economic stability, staffing and management issues, and potentially adverse
tax consequences for the company’s international operations.

Technology Risks Include:
Resurgence at AMD and the commercialization of competing technologies from AMD or
in the graphics segment with NVIDIA.

Continued potential ITC and Nvidia litigation risks.




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INTEL CORPORATION (NNM: INTC)                  April 26, 2010

Intel Corporation Quarterly Income Statement




                                                   Page 14
INTEL CORPORATION (NNM: INTC)               April 26, 2010

Intel Corporation Quarterly Balance Sheet




                                                  Page 15
INTEL CORPORATION (NNM: INTC)                                                                                                April 26, 2010

                                                       APPENDIX SECTION
Company Description: Intel is the largest semiconductor company in the world based on revenues, was incorporated in
California in 1968 and became a publicly traded company in 1971. Headquartered in Santa Clara, California, Intel employs
approximately 79,000 people worldwide. Intel Corporation designs, manufactures, and sells integrated circuits for computing and
communications industries worldwide. It offers microprocessor products used in notebooks, netbooks, desktops, servers, workstations,
storage products, embedded applications, communications products, consumer electronics devices, and handhelds.

IMPORTANT DISCLOSURES:
Price Target Risks & Related Risk Factors:
Market Risks Include:

Macroeconomic risk in the PC and Desktop market with weak consumer spending in the U.S;

Adoption of Intel's integrated graphics platforms Arrandale-Pinetrail-Clarksdale family into PCs;

Continued success in INTC's research and development efforts and timely introduction and execution of its new products at 24nm and
into the graphics/server markets;

Very capital-intensive operations, particularly in regard to 32nm; but on the flip side, it has set a very high entry barrier;

Continued dependence on the PC franchise;

Lower margins in new and emerging markets such as low-cost PC, Mobile Internet device markets; and emerging geographies;
High exposure to Asia and discretionary consumer spending; and

Unexpected changes in legal and regulatory requirements, tariffs and exchange rates, political and economic stability, staffing and
management issues, and potentially adverse tax consequences for the company's international operations.

Technology Risks Include:
Resurgence at AMD and the commercialization of competing technologies from AMD or in the graphics segment with NVIDIA.

Continued potential ITC and Nvidia litigation risks.


Valuation Methodology:
We are initiating coverage of Intel Corporation (NASDAQ: INTC) with a Buy rating and $28 price target. We apply a 14x P/E
multiple to our 2010 EPS estimate of $1.97, well within the shares' five-year historical range of between 10x and 32x forward P/E, a
conservative multiple to derive our price target. Intel continues to execute well, with production now at 32nm, new integrated graphic
SoC and Nehalem Server ramping and tailwinds from the PC-Server markets. With the next generation 24nm coming out in 4Q10
almost 12 months ahead of the competition, INTC should maintain the cost and technology lead.

Regulation Analyst Certification:
I, Vijay Rakesh, hereby certify the views expressed in this research report accurately reflect my personal views about the subject
security(ies) or issuer(s). I further certify that no part of my compensation was, is, or will be, directly or indirectly, related to the
specific recommendations or views expressed by me in this report.

Sterne, Agee & Leach, Inc. Disclosure Legend as of April 26, 2010:

            Company                                                                           Disclosure(s) – See Below
            Intel Corporation (INTC - NNM):                                                   1
            NVIDIA Corporation (NVDA - NNM):                                                  1

    1.     Sterne, Agee & Leach, Inc. makes a market in the shares of the subject company.
    2.     Sterne, Agee & Leach, Inc. has, over the past 12 months, managed or co-managed a public securities offering or
           provided other investment banking services for the subject company.
    3.     Sterne, Agee & Leach, Inc. has various security accounts open for the subject company.

                                                                                                             Appendix Section, Page I
INTEL CORPORATION (NNM: INTC)                                                                                             April 26, 2010

    4.    Sterne, Agee & Leach, Inc. provides administration for 401(k) plans for the subject company.
    5.    Sterne Agee Financial Services, Inc. has clearing agreements with the subject company.
    6.    The Sterne Agee analyst who has active coverage on this company owns a position in the subject company.
    7.    Sterne, Agee & Leach, Inc. or its affiliates beneficially own 1% or more of any class of common equity securities of the
          subject company.

Sterne, Agee & Leach, Inc.’s research analysts receive compensation that is based upon various factors, including Sterne, Agee &
Leach, Inc.’s total revenues, a portion of which is generated by investment banking activities.

Definition of Investment Ratings:
BUY:                       We expect this stock to outperform the industry over the next 12 months.
NEUTRAL:                   We expect this stock to perform in line with the industry over the next 12 months.
SELL:                      We expect this stock to underperform the industry over the next 12 months.
RESTRICTED:                Restricted list requirements preclude comment.

Ratings Distribution:
Of the securities rated by Sterne, Agee & Leach, Inc., as of March 31, 2010, 43.9% had a BUY rating, 52.3% had a NEUTRAL rating,
3.7% had a SELL rating, and 0% was RESTRICTED. Within those ratings categories, 2.04% of the securities rated BUY, 1.94%
rated NEUTRAL, 0% rated SELL, and 0% rated RESTRICTED received investment banking services from Sterne, Agee & Leach,
Inc., within the 12 months preceding March 31, 2010.

ADDITIONAL INFORMATION AVAILABLE UPON REQUEST: Contact Robert Hoehn at 1-212-338-4731.
Other Disclosures:
Opinions expressed are our present opinions only. This material is based upon information that we consider reliable, but we do not
represent that it is accurate or complete, and it should not be relied upon as such. Sterne, Agee & Leach, Inc., its affiliates, or one or
more of its officers, employees, or consultants may, at times, have long or short or options positions in the securities mentioned herein
and may act as principal or agent to buy or sell such securities.

Copyright © 2010 Sterne, Agee & Leach, Inc. All Rights Reserved.

Sterne, Agee & Leach, Inc. disclosure price charts are updated within the first fifteen days of each new calendar quarter per FINRA
regulations. Price charts for companies initiated upon in the current quarter, and rating and target price changes occurring in the
current quarter, will not be displayed until the following quarter.

Price Chart(s):



To receive price charts or other disclosures on the companies mentioned in this report, please contact Sterne, Agee & Leach, Inc. toll-
free at (800) 966-0814 or (205) 949-3689.




                                                                                                         Appendix Section, Page II
                                                     STERNE, AGEE & LEACH, INC.
                  Founded in 1901, Sterne Agee has been providing investors like you with high-quality investment opportunities for
                  over a century. During the early years, our founders prominently established themselves in the financial securities
                  industry in the southeastern United States. Today, we have expanded to serve all regions of the country. Sterne,
                  Agee is headquartered in Birmingham, Alabama with offices in 22 states including Alabama, Arkansas, California,
Florida, Georgia, Illinois, Kentucky, Louisiana, Maine, Massachusetts, Minnesota, Mississippi, Missouri, New Jersey, New York,
North Carolina, Pennsylvania South Carolina, Tennessee, Texas, Virginia, and Wisconsin. Sterne Agee is one of the largest
independent firms in the country. Sterne, Agee & Leach, Inc. is a division of Sterne Agee Group, Inc., which also includes The Trust
Company of Sterne, Agee & Leach, Inc.; Sterne Agee Asset Management, Inc.; Sterne Agee Clearing, Inc.; and Sterne Agee Financial
Services, Inc.—www.sterneagee.com
                                              EQUITY CAPITAL MARKETS ADMINISTRATION
Ryan Medo           Managing Dir., Eq. Cap. Mkts.     (205) 949-3623     David Lee                  Director, Equity Products          (205) 949-3689
Robert Lake         Vice President                    (205) 949-3624     Yan Chao                   Associate                          (205) 949-3622
                                                                         Chuck Carlisle             Sr. Portfolio Analyst              (205) 949-3571

                                                           EQUITY RESEARCH
                                      Robert Hoehn      Director of Research                    (212) 338-4731

CONSUMER                                                                       FINANCIAL SERVICES (CONT.)
 Apparel Retailing & Toys                                                        Mortgage Finance & Specialty Finance
  Margaret Whitfield            SVP, Sr. Analyst      (973) 519-1019             Henry J. Coffey, Jr., CFA       SVP, Sr. Analyst        (615) 760-1472
  Jennifer Milan                VP, Analyst           (212) 763-8211             Jason Weaver                    Associate               (615) 760-1475

  Educational Services / Interactive Entertainment                               Property/Casualty Insurance
  Arvind Bhatia, CFA            Mng. Dir.             (214) 702-4001             Dan Farrell                     Mng. Dir.               (212) 338-4782
  Luke Shagets                  Analyst               (214) 702-4030
                                                                               GLOBAL INDUSTRIAL INFRASTRUCTURE (GII)
  Footwear & Apparel
  Sam Poser                     SVP, Sr. Analyst      (212) 763-8226            ACME & Latin America
  Kenneth M. Stumphauzer        Analyst               (212) 763-8287             Lawrence T. De Maria, CFA       Director                (212) 338-4704
                                                                                 Ben Elias, CFA                  VP, Sr. Analyst         (212) 338-4706
  Leisure & Entertainment
  David Bain                    Mng. Dir.             (949) 721-6651             Building, Power & Water Infrastructure
  Sherry Yin                    Associate             (949) 721-6651             Michael J. Coleman, CFA         SVP, Sr. Analyst        (212) 338-4718

  Restaurants                                                                    Engineering and Construction
  Lynne Collier                 Mng. Dir.             (214) 702-4045             Chase Jacobson                  VP, Sr. Analyst         (212) 338-4753
  Philip May                    Analyst               (214) 702-4004
                                                                                 Industrial Components
ENERGY                                                                           Samuel H. Eisner                VP, Analyst             (212) 338-4705
  Oilfield Services & Equipment
  David S. Havens               Mng. Dir.             (212) 763-8238
                                                                                 Multi-Industry
                                                                                 Nicholas P. Heymann             Mng. Dir.               (212) 338-4703
  Karl Sowislo                  Analyst               (212) 338-4732
                                                                                 Paul A. Dircks                  Analyst                 (212) 338-4725
FINANCIAL SERVICES                                                               Jordan Calabrese                Associate               (212) 338-4729
  Asset Management                                                             TECHNOLOGY
  Jason Weyeneth, CFA           Analyst               (212) 763-8293
                                                                                 LEDs
  Banks & Thrifts                                                                Andrew Huang                    Mng. Dir.               (415) 362-6143
  James M. Schutz               Dir. of Fin. Ser.     (864) 241-3384             Naghmeh Rabii                   Associate               (415) 362-6141
  Adam Barkstrom, CFA           Mng. Dir.             (800) 906-0577
                                                                                 Semiconductors
  Blair Brantley, CFA           Analyst               (800) 621-8635
                                                                                 Vijay Rakesh                    Mng. Dir.               (312) 525-8431
  Matthew Kelley                Mng. Dir.             (207) 699-5800
  Mike I. Shafir                VP, Sr. Analyst       (212) 763-8239
  Matthew Breese                Analyst               (207) 699-5800           TRANSPORTATION, SERVICES & EQUIPMENT
  Edward D. Timmons             SVP, Sr. Analyst      (800) 203-5332             Jeffrey A. Kauffman             Mng. Dir.               (212) 338-4765
  Ashby W. Price                Associate             (888) 477-9602             Sal Vitale                      Analyst                 (212) 338-4766
  Brett Rabatin, CFA            SVP, Sr. Analyst      (877) 457-8625             Kanchana Pinnapureddy           Associate               (212) 338-4767
  Kenneth James                 Analyst               (615) 760-1474
  Peyton Green                  Mng. Dir.             (877) 492-2663           ADMINISTRATION
  Joe Maloney                   Associate             (615) 760-1468             Carlo Francisco                 Supervisory Analyst     (914) 434-3451
                                                                                 Marianne Pence                  Mgr., Res. Admin.       (205) 949-3618
Life Insurance                                                                   Nathan Mitchell                 Editor                  (205) 949-3635
  John M. Nadel                 Mng. Dir.             (212) 338-4717             Elizabeth Koch                  Editor                  (615) 289-4122
  Dennis Zavolock               Analyst               (212) 338-4748

Email Address for Sterne Agee Employees: first initial + last name@sterneagee.com (e.g., jsmith@sterneagee.com)
                                                                 SALES & TRADING
                                  Steve Pokorny       Head of Institutional Sales         (214) 702-4020
                                  JT Cacciabaudo      Head of Trading                     (212) 763-8288

ATLANTA                                       DALLAS                                         NEW YORK (cont.)
Adam Aspes               (404) 812-3068       Jennifer Elkins            (214) 702-4050      Jeff Hood             (212) 490-1453
Adam Kramer              (404) 814-3902       Mary Foster                (214) 702-4009      Ed Iannone            (212) 763-8240
Jamie Pennington         (404) 814-3948       Dan Griffith               (214) 702-4044      Alex Jones            (212) 338-4701
John T. Riley            (404) 814-3966       Candace Martin             (214) 702-4033      Carey Kaufman         (212) 763-8274
                                              Bob Nasi                   (214) 702-4017      Konrad Krill          (212) 763-8218
BIRMINGHAM                                    John Schwalenberg          (214) 702-4010      Robert McGuire        (212) 763-8236
Gary Hagstrom            (205) 380-1782                                                      Brian McCloskey       (212) 763-8272
Sam Haskell              (205) 380-1781       MINNEAPOLIS                                    Van Martin            (212) 763-8214
Scott Hughen             (205) 380-1764       Randy Mason                (952) 820-4461      Adam Merlo            (212) 763-8232
Claude Preston           (205) 380-1762       John Regan III             (952) 841-6408      John Molster          (212) 763-8210
Amber Spitzer            (205) 380-1761                                                      Jake Morton           (212) 763-8261
                                              NEW ORLEANS                                    Michael Newman        (212) 763-8258
BOSTON                                                                                       Ryan Oelkers          (212) 763-8254
                                              Patrick Donnelly           (504) 636-4902
                                                                                             Kevin O'Keefe         (212) 763-8208
Frank Casey              (617) 478-5007       Cheryl Grabert             (504) 636-4911
                                                                                             Matt O’Kelly          (212) 763-8227
Richard Gill             (617) 478-5006       John Regan, Jr.            (850) 650-5676
                                                                                             David O’Shea          (212) 763-8260
Tom Goode                (617) 478-5008
                                                                                             Jon Palan             (212) 763-8225
Ian Moran                (617) 478-5003       NEW YORK
                                                                                             Bruce Rae             (212) 763-8271
Mike Roncone             (617) 478-5001       Jason Barber               (212) 763-8219      Kevin Reilly          (212) 763-8209
Nicholas White           (617) 478-5002       Brian Batista              (212) 763-8247      Jon Schenk            (212) 763-8221
                                              Andrew Benenson            (212) 763-8246      Chuck Schroeder       (212) 763-8264
CHICAGO                                       Adam Cavise                (212) 763-8292      Jason Scott           (212) 763-8215
Mark Burrier             (312) 525-8425       Mike Cline                 (212) 763-8268      Bob Sheahan           (212) 338-4757
Scott Hallermann         (312) 525-8421       Tom Criscoula              (212) 338-4719      Miko Tam              (212) 763-8252
Scott Hootman            (312) 525-8426       Noel Cueto                 (212) 763-8251      Scott Tashman         (212) 763-8256
Robert Hurley            (312) 525-8440       Enrico DeMatt              (212) 338-4724
Vesna Radovic            (312) 525-8429       Geri DeVito                (212) 763-8242
Dan Roesner              (312) 525-8433       Eric Dusansky              (212) 763-8231
                                                                                             SAN FRANCISCO
Lacey Spang              (312) 525-8423       Mike Flanagan              (212) 763-8282
                                                                                             Justin Brennan        (415) 362-6140
Curt Thompson            (312) 525-8427       Rich Gallagher             (212) 763-8260
                                                                                             Tom Cervantez         (415) 362-7430
                                              Brian Haise                (212) 763-8206
                                                                                             Chris Larson          (415) 362-6142
                                                                                             Rob Salomon           (415) 362-7432



                                                     INVESTMENT BANKING
Mark Behrman, Mng. Dir.                         (212) 763-8286         Kimberlee Taylor, Admin. Asst.             (212) 338-4715

FINANCIAL INSTITUTIONS GROUP                                          NON-FINANCIALS
Michael J. O’Boyle, Mng. Dir.                   (205) 949-3592        John Bolebruch, Mng. Dir. – Industrials     (212) 338-4716
Michael Perry, Mng. Dir.                        (212) 338-4736        Ted Cook, Mng. Dir. – Industrials           (212) 338-4779
Robert P. Hutchinson, Mng. Dir.                 (617) 478-5011        Richard Mandery, Mng. Dir.                  (212) 338-4776
Jeffrey W. Prochnow, CFA, SVP                   (402) 778-5054        Richard Cunniffe, SVP – Industrials         (212) 338-4713
D. Timothy Speegle, SVP                         (205) 380-1720        Will Brooke, Analyst - Industrials          (212) 763-8278
John McCrory, SVP                               (205) 949-3664
Robert Toma, VP                                 (617) 478-5005
Horacio Barakat, VP                             (212) 338-4768        EQUITY SYNDICATE
Andrew Stager, Associate                        (617) 478-5009        Craig B. Jampol, Mng. Dir.                  (212) 338-4708
Nathan Strall, Associate                        (617) 478-5010
Jung Lee, Associate                             (212) 338-4769
Michael Stern, Analyst                          (212) 338-4756


Email Address for Sterne Agee Employees: first initial + last name@sterneagee.com (e.g., jsmith@sterneagee.com)
                                                             LOCATIONS


      Corporate Headquarters                               13727 Noel Road                             12020 Shamrock Plaza
                                                                 th
     800 Shades Creek Parkway                                  7 Floor                                        Suite 200
             Suite 700                                    Dallas, TX 75240                             Omaha, NE 68154-3537
       Birmingham, AL 35209                                 (972) 239-4806                                 (402) 778-5054
                                                            (800) 404-2226                               (402) 778-5135 fax
 (205) 949-3500     (800) 239-2408
         (205) 802-1414 fax                               (972) 980-7125 fax
                                                                                                       620 Newport Center Dr.
                                                                                                             Suite 1100
       OTHER LOCATIONS                                706 E. Washington Street
                                                       Greenville, SC 29601                          Newport Beach, CA 92660
                                                           (864) 233-6630                                  (949) 721-6651
          3475 Lenox Road                                (864) 233-6630 fax                              (949) 721-6652 fax
              Suite 800
         Atlanta, GA 30326
           (404) 365-9630                              3100 West End Avenue                                  2 Union Street
         (404) 812-3097 fax                                  Suite 930                                         Suite 403
                                                        Nashville, TN 37203                              Portland, ME 04101
                                                          (615) 269-7323                                    (207) 699-5800
  8400 Normandale Lake Boulevard                          (615) 269-9223                                  (207) 699-5888 fax
             Suite 920
     Bloomington, MN 55437
          (952) 841-6410                                                                                5609 Patterson Avenue
                                                           639 Loyola Ave
          (800) 949-4102                                                                                        Suite B
                                                              Suite 200
                                                       New Orleans, LA 70113                            Richmond, VA 23226
                                                           (504) 299-1021                                   (804) 521-3224
         265 Franklin Street                                                                              (804) 521-3199 fax
                                                           (888) 978-3763
              Suite 310
                                                         (504) 299-0956 fax
         Boston, MA 02110
           (617) 478-5000                                                                                One Maritime Plaza
           (800) 836-4616                                                                                    Suite 1940
                                                        2 Grand Central Tower
         (617) 443-0310 fax                                                                           San Francisco, CA 94111
                                                         140 East 45th Street
                                                                                                           (415) 362-7430
                                                              18th Floor
                                                                                                         (415) 362-7436 fax
                                                        New York, NY 10017
         123 N. Wacker Drive
                                                            (212) 763-8224
              Suite 1250
                                                            (800) 966-0814
         Chicago, IL 60606
                                                          (212) 763-8201 fax
            (312) 525-8440
            (800) 966-0815
          (312) 525-8438 fax




Email Address for Sterne Agee Employees: first initial + last name@sterneagee.com (e.g., jsmith@sterneagee.com)

								
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