Intel’s (INTC)CEO gave a very informative interview to London’s Financial Times on Thursday, in which he discussed reason for optimism for his company in the year ahead. Intel’s stock has recovered after hitting its lowest point in more than a decade in February of this year. The world’s largest chip-maker was pinned down by struggling sales, especially from corporate customers who were left reeling by financial crisis over the last year.

Intel’s Paul Otellini has not been shy about his belief that the worst is behind his company. Analysts have taken notice to his upbeat outlook for Intel and apparently they agree, as the estimates for Intel’s current quarter and fiscal year have edged up considerably in the last 90 days. Below is the key section of Otellini’s interview, but you can find the full article here.INTC

“I think corporations’ capital budgets got clamped down fairly aggressively at the end of last year. But in terms of PC refresh I would expect that now to happen in 2010 … The fleet of PCs is getting fairly aged; most corporate notebooks are now over four years old, desktops are over five years old, they need to refresh,” he told the Financial Times in a video interview.

Mr Otellini also highlighted the upcoming launch of Windows 7 operating system by Microsoft next month, saying it would have a big impact on corporate spending: “I think that Windows 7 will help drive a refresh in corporations and we’re cautiously optimistic we’ll see that in 2010.”

Otellini sees a bright future with the aging fleet of computers in companies across the globe. It has been the consumer who has helped the industry plod along during this difficult period, but there is much more potential in corporate IT spending. Obviously, Intel and Microsoft (MSFT) were disappointed by the adoption rates of Windows Vista operating system. Both firms are optimistic that Vista was simply a one time hiccup and Windows 7 has a more successful launch. One thing we know is that technology continues to evolve and chips will need to be bigger and faster to run Windows 7 versus the soon to be two generations ago, Windows XP.

At Ockham, we currently have a Fairly Valued rating on Intel after the stock has had an impressive run since its lows. INTC is trading within its historically normal range of price-to-cash earnings, but it is trading well below its historically normal range of price-to-sales. It is clear that Otellini believes his stock is undervalued, and he may be right. As of right now, Intel is trading within our expected price range of $18 to $25.

Intel Anticipating an Refresh of Corporate IT Spending Cycle