Don't miss the message of Intel

This quarter points to a secular shift -- and it means there's more upside to come.

By Jim Cramer Apr 14, 2010 7:18AM
Jim Cramer

By Jim Cramer, TheStreet

 

Cyclical or secular? This is the question I always used to put to my team on any stock that just beat numbers so big that I have to ask if there is something larger than just a bump in sales that made things better.

 

And on Intel (INTC), I say "secular," meaning new product cycle that is unique to Intel. The reason so many analysts were lukewarm or negative on Intel was that all of the ordering was perceived to be restocking. That the inventories had gotten so low that there was simply a dearth of supply, not that demand had gotten more aggressive or that they had something new and compelling that could last.

 

I think last night showed that this second wave is demand-driven not supply-driven -- personal computers are taking off and communications and server chips are starting to make a real difference, such a difference that we could see gross margins exceed old extreme levels of 63%-64%.

 

That's huge.

 

That's different.

 

That's secular.

 

Bing: More on Intel

 

So when you go to short it, which is what I figure people will do here, remember that it is easy to short a cyclical but very hard to short something long-lived and demand-driven. Just keep in mind and temper the (knee-jerk) negativity.

 

At the time of publication, Cramer was long Intel.

 

Jim Cramer is co-founder and chairman of TheStreet. He contributes daily market commentary for TheStreet's sites and serves as an adviser to the company's CEO.

 

Related Articles:

 

Be wary of the tech lovefest

 

Apple iPhone's big picture 

 

Exxon is a better value than Chevron

 

 

1Comment
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

113
113 rated 1
268
268 rated 2
422
422 rated 3
632
632 rated 4
512
512 rated 5
518
518 rated 6
682
682 rated 7
523
523 rated 8
343
343 rated 9
124
124 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
KOGKODIAK OIL & GAS Corp10
COPCONOCOPHILLIPS9
TAT&T Inc9
DVNDEVON ENERGY CORPORATION9
EOGEOG RESOURCES Inc9
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.