Intel Corporation (INTC) is scheduled to report fourth-quarter 2023 results on Jan 25 after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 95.24%. It pulled off a trailing four-quarter earnings surprise of 136.31%, on average.
The Santa Clara, CA-based semiconductor company is likely to report higher revenues year over year, driven by healthy demand trends in Data Center and AI Group. The introduction of cutting-edge AI-based products is also likely to boost revenues from the Client Computing Group.
Market Trends and Strategic Moves
In the fourth quarter, Intel launched AI chips for data centers and PCs—a major architectural shift for the company in 40 years. This strategic move aims at solidifying Intel’s position in the expanding AI sector, covering cloud and enterprise servers to networks, volume clients, and edge environments.
Furthermore, the introduction of the 5th Gen Intel Xeon processor family, with built-in AI acceleration capabilities, is expected to drive better performance and efficiency, catering to a wide range of customer workloads.
Additionally, partnerships with Databricks and Remark Holdings, Inc., leveraging Intel-powered solutions, are anticipated to generate incremental revenues.
The Zacks Consensus Estimate for total revenues in the quarter is approximately $15,140 million, reflecting an increase from the year-ago quarter’s reported figure of $14,042 million. The consensus estimate for adjusted earnings per share stands at 44 cents, indicating strong growth from 10 cents reported in the prior year.
Key Business Developments
During the quarter, Intel unveiled plans to establish its Programmable Solutions Group (“PSG”) operations into a standalone business. This move aims to provide PSG with autonomy and flexibility to pursue its growth trajectory within the FPGA industry.
Intel has also inked an agreement with the federal government of Israel to invest $25 billion to expand its chip manufacturing facility in the Middle Eastern country, marking a significant milestone amid regional unrest.
Earnings Forecast
Despite an anticipated rise in revenues, our proven model does not predict an earnings beat for Intel this time around, with the company currently holding a Zacks Rank #4 (Sell).
The Earnings ESP stands at -0.32%, underscoring the prevailing market sentiment that challenges the prospects of an earnings outperformance.
Considerations for Investors
As investors await Intel’s earnings report, alternative investment options may be considered given the market sentiment. Companies like InterDigital, Inc., NVIDIA Corporation, and Meta Platforms, Inc., present potential opportunities for earnings beats this season.
Staying informed about upcoming earnings announcements through the Zacks Earnings Calendar could help investors make informed decisions.
For investors, the upcoming Intel earnings report provides an opportunity to gauge the company’s resilience amid market shifts and strategic initiatives. Harnessing insights from earnings reports of companies within the sector can serve as a guidepost for investors amid the dynamic market landscape.
