Data Center Group Will Likely Drive Intel’s Near Term Growth
Intel (NASDAQ:INTC) has seen solid growth in the recent quarters, primarily led by its Data Center Group, which is benefiting from cloud computing. The company is seeing strong demand for Xeon Scalable, and it has aided the pricing growth. This trend will likely continue in the near term, and drive the earnings growth for Intel. We have created an interactive dashboard ~ What Is The Outlook For Intel ~ on the company’s expected performance in 2018. You can adjust the revenue and margin drivers to see the impact on the company’s overall revenues, earnings, and price estimate.
Expect Data Center Group To Lead Earnings Growth
We forecast Intel’s Data Center Group revenues to grow around 20% to a little under $23 billion in 2018. The segment is benefiting from its cloud business, as well as high performance products, such as Xeon Scalable. Growth in cloud computing will result in greater sales of bigger, faster, and higher-end servers at the expense of cheaper ones, and the company will benefit from server virtualization. The segment revenues have grown by over 25% in H1 2018. Higher demand for Xeon Scalable has aided the pricing growth, and this has resulted in better margins. We forecast the segment adjusted EBITDA margin of 51% for the full year.
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