The markets are moving sluggishly to open this week of investing. The Dow Jones Industrial Average (Dow Jones Indices:.DJI) is taking a breather after last week’s wild up-and-down ride, and Intel Corporation (NASDAQ:INTC) stock has taken an early lead on the index. The U.S. economy got some good news earlier in the day when ratings firm Standard & Poor’s upgraded the American credit outlook from “negative” to “stable.” The agency added in a warning that it expects future fiscal issues, such as the debt ceiling, to remain politically divisive in the future, which could hurt economic decision-making going forward.
Let’s take a look at why investors are cheering Intel Corporation (NASDAQ:INTC) on today.
Intel embraces the future
Intel Corporation (NASDAQ:INTC)’s shares have picked up 1.6% as of 2:30 p.m. EDT to lead the Dow higher, and a recent slate of good news from the company has investors thinking optimistically. The chip maker scored a huge win recently when electronics maker Samsung chose Intel to provide chips for its Galaxy Tab 3 10.1 phone — a giant step forward for the company, whose rivals have raced past it in the mobile industry. Intel already boasts chips in a number of tablets set to arrive across the mobile sphere, and the phone market will provide the last entry point this company needs to become a major mobile player.
If Intel Corporation (NASDAQ:INTC) can solidify a deal with Samsung and firm up that relationship for the future, it will be well-placed to capitalize on one of the biggest mobile-producers on the market. It helps that Intel’s newest processors have received high praise: ABI Research analysts offered strong approval of the company’s latest Atom processor, saying it performs well against rival products from QUALCOMM, Inc. (NASDAQ:QCOM) and others.
Considering that QUALCOMM, Inc. (NASDAQ:QCOM) has long been one of the most dominant chip-makers in the mobile industry and is perhaps Intel’s most significant competitor in the market, Intel Corporation (NASDAQ:INTC) will need to keep this outperformance up. Qualcomm won’t sit and watch as its rival dazzles the mobile market. The firm’s Snapdragon 600 line of chips has impressed major phone-makers such as Samsung and HTC, and Stene Agee analyst Vijay Rakesh reported to ZDNet that Qualcomm could capture up to 70% of the chip-making for Samsung’s Galaxy S4s.
Intel won’t be able to catch up to QUALCOMM, Inc. (NASDAQ:QCOM) immediately, but the company is also making inroads in other areas as it pivots away from the declining PC market’s. The company continues to explore developing a TV business, and Intel has made waves by offering to pay considerably more to media providers than traditional cable businesses. While Intel Corporation (NASDAQ:INTC) is expected to pay more, considering that it’s still in the start-up phase and lacks viewership, a significant premium could be enticing to media developers looking for a new niche. Intel plans to launch the business later this year, but if it can’t hammer out deals with enough major content-providers by that time, it’ll have to push back plans until 2014.
Will it work? Intel Corporation (NASDAQ:INTC)’s plans are still developing, so it’s too early to say whether or not the company will succeed in competing with the likes of Google Inc (NASDAQ:GOOG) TV or Apple Inc. (NASDAQ:AAPL) TV. Investors should keep an eye on the developments, however, as Intel’s post-PC plans will drive the future of this company.
The article Why Intel’s Big Plans Are Beating the Dow’s Drop originally appeared on Fool.com and is written by Dan Carroll .
Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Apple, Google, and Intel. The Motley Fool owns shares of Apple, Google, Intel, and Qualcomm.
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