Intel is set to report earnings after Thursday's closing bell, with investors keenly focused on its performance in AI server CPUs and the foundry business.
The stock has seen a notable decline of more than 27% from its June 22 record high of nearly $141 per share, primarily due to a broader sell-off in the semiconductor sector as market participants reassess spending by hyperscalers on AI infrastructure. Despite this pullback, Intel has demonstrated strong performance this year, with a 280% gain up to its peak, making it susceptible to profit-taking.
Investors are looking for evidence that demand for Intel's CPUs remains robust, particularly as AI applications evolve and require more advanced processing capabilities. Intel's first-quarter revenue of $13.6 billion exceeded guidance, but supply constraints limited potential growth.
The company is also expanding its foundry business, which could provide a competitive edge against rivals like AMD and Nvidia, as it operates its own manufacturing facilities unlike many competitors who rely on third-party manufacturers like TSMC. Recent investments, including a $5.7 billion commitment to its Leixlip, Ireland facility, aim to boost production capacity.
Analysts are cautiously optimistic, with a projected 12% year-over-year revenue increase to $14.42 billion for the second quarter and earnings per share expected to rebound to 21 cents.
While many analysts maintain hold ratings, there is a bullish sentiment regarding Intel's long-term prospects, especially under CEO Lip-Bu Tan's leadership, which has been praised for revitalizing the company's strategy and operations