Just how stable will the personal computer market be in 2015?
That's a big question for Intel investors, as the chip giant prepares to release its fourth-quarter earnings report Thursday after the close.
Analysts expect to see Intel report earnings-per-share of $0.66 on sales of $14.7 billion, according to FactSet. That would be a 6.3 percent jump on the top line.
For Intel bulls, 2014 was a banner year. The stock surged some 40 percent, its best year since 2003. Much of the enthusiasm was because of the PC market, which didn't collapse as some expected, but instead remained basically flat.
Earlier this week, IDC reported that global PC shipments fell 2.4 percent year over year in the fourth quarter, leading to an overall decline in 2014 of 2.1 percent.
For its part, Gartner reported a fourth-quarter increase of 1 percent and a slight decline for the year. Analysts at the research firm noted that the PC market is "quietly stabilizing."
That's critical for Intel, as its PC business accounts for about 60 percent of its sales. The question for investors is how the PC market will fare in 2015.
The relative stability in the PC market last year was due, in part, to Microsoft's ending support for its Windows XP operating system, prompting companies to upgrade their computers.
Intel bulls, like the team at FBR, believe that tailwind will continue this year. They're also banking on the release of Windows 10 leading to a better-than-expected refresh cycle.
In the fourth quarter, Wall Street believes sales in Intel's PC Client Group clocked in at $9.2 billion, which would mean a 7.5 percent jump year over year.
The other significant part of Intel's business is selling chips for servers. Analysts at MKM, who recently upgraded to Intel to a Buy, argue that this division will continue to benefit from the acceleration into the big data analytics era and continued cloud investments.
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Analysts covering Intel believe fourth-quarter revenue in this division rose nearly 26 percent year over year.
Challenges for Intel include its mobile division, which the company said would continue to suffer losses in 2015, albeit at a slower rate. Intel's executives have made it clear to both analysts and investors that they intend to make money in mobile.
But the most obvious cause for concern, at least among Intel skeptics, is valuation. After such a strong run, Intel's stock looks more expensive, at least based on some metrics.
Intel is now trading at 15 times forward earnings, which is above its five-year average.