Intel Results Boost Confidence in Microsoft $INTC $MSFT PRICE TARGET $32

Credit Suisse reiterate a Outperform rating on INTC based on our belief that the company is well positioned to benefit from (1) Rebound in enterprise IT spending (60%+ of revs) driven by an aging corporate desktop (~5 yrs) and notebook (~4 yrs) installed base, (2) Accelerating PC growth especially in emerging markets, (3) Strong Nehalem driven server cycle in volume (Dual-Processor or Nehalem/Westmere EP) and high performance (Multiprocessor or Nehalem EX), and (4) Ramp of higher margin 32nm products in 2010/11 with manufacturing, cost and performance advantages over competition. Concerns on the stock continue to be dominated by inventory double ordering, weak enterprise PC demand, weakening product mix driven in part by Intel Atom’s “goodenough” computing and the mix-shift towards consumer PCs, and lastly, increased
competition from ARM processor based low-end netbooks.

Intel $30 Price Target $INTC [credit suisse] Nehalem EX Launch For High-End Servers

Nehalem EX Launch For High-End Servers
■Reiterate OP. Our $30 PT represents a 15x P/E multiple to our $2.00 earnings power est. for this cycle.

■ Bottom Line. INTC today introduced Nehalem EX targeted towards high-end  and mission critical UNIX servers in San Francisco today. This combined with a powerful Westmere EP performance/power efficiency driven server consolidation cycle in mainstream servers, our positive view on global PC penetration growth, and a cyclical recovery in corporate PC/server spending provide significant cushion to our $2+ earnings power this cycle.