Greenberg: Analyzing Intel's Optimistic Conference Call

Intel's conference call was about as optimistic and bullish as any I've heard.

It was almost as if they were pinching themselves because they couldn't believe things are as good as they are.

Among the highlights from the top execs:

  • Demand was driven by Internet adoption.
  • Server demand was surging as cloud computing took hold.
  • Margins were driven by a "rich" mix of products, not average selling prices.

And Intel CEO Paul Otellini said that he's as excited about the company's new Sandy Bridge product as he has been about any product in years.

If there was any area of concern it was ballooning inventories, but the company said the build was conscious and "important."

As you might guess, not everybody is wowed.

As one skeptic put it to me: This is a company that has grown at sub-GDP growth for years due to the reality of semiconductor pricing. And without those bulging inventories, margins wouldn't be where they are.

My point: Either this is really the second coming of the Internet, and another one of those all-in moments, or the sustainability of these numbers are dubious. And this note: If you're extrapolating what Intel said out to all chips stocks, remember that Intel's strength in the most recent quarter was tied more to its enterprise business, not the consumer.

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