Intel Corporation INTC recently collaborated with Hepsiburada HEPS to launch an e-commerce platform for small and medium enterprises (SMEs) in Turkey. Dubbed DigitalSME, the program is likely to accelerate the digital transformation of local SMEs and drive the region's overall economic growth.
Founded in Istanbul in 2000, Hepsiburada operates as a leading e-commerce technology firm in Turkey and is reportedly the fastest-growing e-commerce operator in Europe. The company’s name translates to English as “all here” or “everything is here” with more than 43 million products available on its platform. The products are offered through a ‘Super App’ that can offer everything from same-day groceries, clothing, beauty products, auto supplies and electronics to flights and payment services, via an embedded digital wallet called Hepsipay. Hepsiburada has also pre-built an installment payment service facility into its platform, along with a seamless free return policy involving a super-efficient logistics network.
Hepsiburada now aims to tap the technological prowess of Intel to help SMEs develop their e-commerce platform and expand their digital business through DigitalSME support program. The participants in this program will be eligible for discounted hardware and software tools, along with requisite training for effective advertising methods, improvement in brand awareness, maximization of social media coverage and operational tips for enhancement of customer satisfaction. Intel will offer a 10% discount on its 11th generation products and additional discounts on printers, network and antivirus software. Moreover, SMEs will also get free training for HepsiAd – the advertising platform of Hepsiburada – and a grant of 1,000 Turkish lira.
Intel is betting big on the IoT business and is investing heavily to gain a higher market presence. While the focus was earlier on making the best computing chips and generating industry-leading margins from them, the company now prefers to focus on a product range targeting different market segments. Management believes that the higher-end business in more developed economies continues to look up, but the new strategy should help it get into many more device categories, where Intel products will continue to enjoy a premium based on performance and cost of ownership.
However, Intel is witnessing intensifying competition in the server, storage and networking markets. Moreover, delay in 7 nm process-based chips is a major concern. The company detected a defect mode in the 7 nm process, which caused yield degradation. Notably, Intel’s chips utilize process technologies that are designed in-house. Intel anticipates the release of data center GPU design, Ponte Vecchio, sometime this year. The chipmaker now expects initial production shipments of the first Intel-based 7 nm client CPU in late 2022 or early 2023. Moreover, initial production shipments of Intel’s first in house-based 7-nm data center CPU design are scheduled in the first half of 2023. This, in turn, is likely to lead to pricing pressure and limit margin expansion in the near term. Amid such a scenario, collaboration with the e-commerce platform of Hepsiburada is expected to help extend its market presence in emerging markets like Turkey.
The stock has lost 6% over the past year against the industry’s growth of 49.4%. Nevertheless, we remain impressed with the inherent growth potential of this Zacks Rank #4 (Sell) stock.
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A better-ranked stock in the industry is STMicroelectronics N.V. STM, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past year, STMicroelectronics has gained a modest 21.1%. Earnings estimates for the current year for the stock have moved up 14% over the past year, while that for the next fiscal is up 34.3%. STM has a long-term earnings growth expectation of 5% and delivered an earnings surprise of 3.4%, on average, in the trailing four quarters.
NVIDIA Corporation NVDA, sporting a Zacks Rank #1, is another solid pick for investors. It delivered an earnings surprise of 7.7%, on average, in the trailing four quarters and has a long-term growth expectation of 19.2%. Earnings estimates for the current year for NVIDIA have moved up 48.8% since January 2021, while that for the next fiscal is up 54.1%.
Over the past year, the stock has gained a solid 106.9%. NVIDIA is gaining a decent market share among the gaming service providers. The strong line-up of advanced graphics cards has made it a favorite graphics card provider among PC makers. A strong uptick in PC gamers, esports players and higher spending on the gaming GPUs are key catalysts. Further, NVIDIA’s Turing GPU and its real-time ray tracing technology are witnessing a massive adoption.
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