Intel Stock Forecast: Intel Has A Loyal Customer In Apple

motek 1The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology  – Senior Analyst at I Know First.

Intel Has A Loyal Customer In Apple


  • The top PC and server hardware vendors have announced their support of AMD’s Ryzen and EPYC processors.
  • AMD has an exclusive supply deal on discrete GPUs for Mac and MacBooks. Apple has so far stayed quiet about Ryzen, Threadripper, and EPYC.
  • Intel obviously has a very loyal processor customer in Apple. Ryzen may find some support among Windows/Linux computer builders but the Mac remains Intel Inside forever.
  • Apple is the world’s no.4 PC vendor. The long-term prosperity of Intel on desktop processors is safe as long as Apple keeps ignoring AMD’s new Ryzen processors.
  • I rate INTC as a buy. I Know First still has positive near and long-term algorithmic forecasts for INTC.

I have a good reason why we should stay long Intel (INTC). In spite of the proclamations of other PC vendors supporting the Ryzen processors of Advanced Micro Devices (AMD), Apple (AAPL) stayed mum. Intel’s dominant market share in PC processors is safe because Apple continues to ignore AMD’s Ryzen/Threadripper processors.

HP, Inc. (HPQ), Lenovo (LNVGY), Dell, and Asustek (ASUUY) have all released Ryzen-equipped PCs in time for the back-to-school season. However, Intel still touts more than 77% of the PC processor market.

intel apple

(Source: PassMark)

AMD enjoys an exclusive right to supply discrete GPUs (Graphics Processing Units) to Macs and MacBooks. Apple apparently has no plans yet to test Ryzen processors. The latest macOS High Sierra operating system is still coded for Intel-only optimization.

You can search it online, not one person was able to use VMware (VMW) Workstation to create a High Sierra virtual machine on a Ryzen or Threadripper-equipped computer. I am currently running a VMware macOS Sierra 10.12 on a Intel Core i5-4460 desktop computer. I allocated 4GB of RAM to it and it can run graphics/design Mac apps at 80% native speed. As far as I know, nobody was able to efficiently run VMWare virtual machines of Mac OS X 10 and up.

intel apple

(Source: Motek Moyen)

Apple continues to develop its Mac OS for the exclusive benefit of Intel. Is spite of the decent benchmark scores and cheaper price tags of Ryzen, Apple wants to stay loyal to Intel processors. Apple’s 2005 decision to switch to Intel x86 processors beginning 2006 has compelled it to ignore AMD processors until now, and maybe forever.

Why Apple Is Important

Apple is the fourth largest vendor of personal computers. It sells more than 4.5 million units per quarter of its pricey Intel-powered Mac and MacBook computers. It also buys only the mid and higher-end x86 processors from Intel. Apple doesn’t buy cheap Celerons or Atom CPUs for its Mac products.

My point is that Apple’s loyalty is a long-term tailwind for Intel. Intel surely grants Apple bulk discount prices for Core processors. However, Intel still enjoys a higher overall margin supplying processors to $999-$5,999 Mac computers than supplying processors to the sub-$600 computers of Dell or HP.

Mac sales still generate more than $5.8 billion for Apple. I guesstimate that Apple still orders $4 to $6 billion worth of x86 processors from Intel every year. Intel’s expected revenue for FY 2017 is $59.5 billion. Apple contributing around $6 billion to Intel’s annual revenue is therefore an important tailwind.

intel apple

Intel’s Coffee Lake Was A Prompt Answer To Ryzen

Intel initially underestimated the commercial success of AMD’s Ryzen desktop processors. The 7th generation Kaby Lake processors last January was obviously a weak reply to Ryzen. Intel judiciously unveiled its 8th Generation or Coffee Lake processors last month.

Apple will likely ignore Ryzen and use Coffee Lake for its next models of the Mac, Mac Pro, and MacBook computers. Apple’s Mac design has always been optimized for performance, and Intel’s 6-core Coffee Lake processors tout better benchmark scores than AMD’s 8-core Ryzen CPUs.

Below is a comparative chart of GeekBench benchmark scores of Coffee Lake and Ryzen 7 processors.

intel apple


Intel will reportedly launch commercial versions of Coffee Lake processors by October 5. This is just in time for PC vendors like HP and Dell to come up with PCs for the Christmas shopping season. Expect Intel’s Q3 and Q4 2017 to show a positive Quarter-over-Quarter growth in Client Computing Group.


Intel sells more expensive processors than AMD. However, the better performance of a 6-core Intel Coffee Lake processor than an 8-core AMD Ryzen nailed the long-term loyalty of Apple. Coffee Lake confirmed that Intel still has the lead in x86 processor design over AMD. Apple will always choose the best processors for its expensive Mac OS computers.

Apple’s exclusive use of Intel processors makes INTC a buy. The near and long-term algorithmic forecasts for INTC are also positive.

intel apple

Past I Know First Forecast Success with INTC

I Know First has been bullish on Intel shares in past forecasts. On April 15, 2015, an I Know First Analyst wrote about Intel. In the article, it said that in the face of declining PC sales, Intel has been focusing on other markets to reduce its dependence on this one. Since then, Intel shares have been very volatile but risen 10.21% in line with the I Know First algorithm’s forecast. See chart below.

intel stock forecast

(Source: Google Finance: INTC)

This bullish forecast for INTC was sent to I Know First subscribers on on April 15, 2015. To subscribe today click here.

I Know First Algorithm Heatmap Explanation

The sign of the signal tells in which direction the asset price is expected to go (positive = to go up = Long, negative = to drop = Short position), the signal strength is related to the magnitude of the expected return and is used for ranking purposes of the investment opportunities.

Predictability is the actual fitness function being optimized every day, and can be simplified explained as the correlation based quality measure of the signal. This is a unique indicator of the I Know First algorithm. This allows users to separate and focus on the most predictable assets according to the algorithm. Ranging between -1 and 1, one should focus on predictability levels significantly above 0 in order to fill confident about/trust the signal.

apple stock forecast

apple stock forecast