Intel's (NASDAQ:INTC) $1.5 Billion Payment to NVIDIA (Nasdaq:NVDA)

Commenting on the settlement between Intel (NASDAQ:INTC) and NVIDIA (Nasdaq:NVDA), where Intel will pay them $1.5 billion licensing fee in 6 annual installments, Needham said it'll have no major impact on the earnings of Intel.

Needham said, "...We believe the $1.5B licensing fee, payable to NVIDIA in six annual installments, is financially a good price for Intel for such technology and has limited financial impact on INTC’s earnings. We are slightly altering our estimates to reflect the licensing payments, and reiterate our rating...The amortization impacts 2011 GM and EPS by 39bps and $0.02, respectively, bringing our 2011 EPS estimate to $1.88 from $1.90. Our 2012 EPS estimate is revised to $2.12 from $2.15 and our GM assumption falls 49bps to 65.6%."

Needham & Company maintains a "Buy" on Intel, which was trading at $20.85, up $0.16, or 0.80 percent. Needham has a price target of $26 on Intel.