With 56% of analysts recommending a “buy” option, 35% recommending a “hold”, and 8% recommending a “sell”, the outlook on Intel Corporation (NASDAQ:$INTC) seems divided to say the least.

Perhaps a trend in the semiconductor sector, analysts also remain divided over Advanced Micro Devices (NASDAQ:$AMD), but appear optimistic about Nvidia (NASDAQ:$NVDA) and Micron Technologies (NASDAQ:$MU).

While Intel has shown strong growth in the data center market, it faces increasing competition from AMD and Nvidia. To successfully maintain momentum, Intel is looking to leverage ts 99% share in the server processor market to command pries.

However, the shift from traditional services to big data analytics and Artificial Intelligence will pose risks for the data centre market. As a response, the company unveiled its neon Xeon processors, catered for AI that saw a record-high early shipment of around 500,000 units. But taking a closer look, the shipment was ordered from only 30 customers who are Intel enthusiasts.

What does this mean? Intel must prioritize price-to-performance and expand their customer base. Its competitor, AMD server processors and NVIDIA’s GPUS are both seeing increasing adoption in the cloud and AI due to price-to-performance optimization. The company doesn’t seem too worried, however, as data center product changes take 18-24 months to reflect in market shares.

A Closer Look:

• Intel’s revenue growth is largely drive by its CCG (Client Computing Group) and DCG (Data Center Group), accounting for 85% of its revenue
• Intel’s revenue rose 9% YoY in fiscal 2Q17
• Intel reflects around a 79% market share in the PC processor market
• Intel revenue is projected to grow 7.2%, to $8.8 billion in fiscal 3Q17

All in all, Intel’s dominance in the PC and server processor market for the past couple decades is undeniable. However, with AMD’s Ryzen and EPYC processors entering the same market, the company is facing a new sense of urgency, perhaps for the first time, to push further into the data center market. The next 6 months will be absolutely crucial for the company, as it hopes to vie for market shares from AMD through releasing Cannon Lake.

Featured Image: depositphotos/ericbvd