The atom bomb for Intel
The Atom processor for Intel is flat out hot. After the MacBook Air set the precedent for smaller computing devices, the industry has been pumping out both small and light computers to meet the demands of consumers. The new laptops are nothing more than for surfing the web or word processing on the go but their low price points and seemingly high powered XP devices are catching on quickly.
Most importantly on these notebooks properly named “netbooks” as their sole utility is that of a screen and full qwerty keyboard are hitting a price range that’s been untouched with laptops. Linux is a popular operating system for the new devices which inevitably lowers the cost. (Linux is currently a free open source operating system that can be used or edited by anyone for any purpose). XP netbooks are still higher priced as the cost of the operating system is still significantly higher than many of the components.
At this price Intel’s stock is ready for a bounce and I think the new Atom processor will lead the way. Consumers are looking for affordable and practical devices that suit an on the go lifestyle. For just $150 more than a smartphone users can enjoy a much larger screen, full keyboards that can be used by hands rather than fingers and faster connectivity. Intel has practically cornered the market on 45nm chipsets until the AMD and IBM connection can muster up something better. This is a niche fully dominated by Intel while it still trades almost 50% off its highs.
At this price there are many reasons to buy Intel both technically and fundamentally. Though it has forecasted weaker earnings and growth, the stock is very well poised to make a healthy move when it bounces. I’d be willing to pull the trigger on call options at this price. January 09 calls with a strike of $10 are carrying little premium, only about $.40 per call at a price of $4.95. I’d be snagging these up at this price.
