The bull market was badly interrupted on Wednesday and the main indexes took a heavy beating. That, however, was just another down day for Intel (NASDAQ:INTC), a stock that just can’t seem to get pulled out of the doldrums. Amidst overall boom times for chip names, the industry giant’s shares have retreated by 38% year-to-date.
With the company set to report Q2 results next Thursday (August 1), Stifel analyst Ruben Roy, who ranks amongst the top 3% of Wall Street stock pros, does not expect any fireworks from the Q2 readout.
Following the U.S. revoking some of the company’s export licenses for Chinese client Huawei in May, the company said it expects revenue will come in under the mid-point of its previous guidance of $12.5 billion to $13.5 billion. Subsequently, Roy lowered his forecast to $12.75 billion, which also falls below the current consensus estimate of $12.93 billion and implies a flat quarter-over-quarter display.
That said, Roy believes “flattish” Q2 results should “yield to a stronger 2H,” with the 5-star analyst believing investors will “look past 1H and generally focus on 3Q guidance and 2H trends.”
“In this regard,” Roy goes on to add, “we continue to expect gradual but consistent recovery for Client and Enterprise CPU sales.”
Roy also anticipates a turnaround for the embedded (PSG) and networking/edge segments and these should offer “additional growth tailwinds later this year and in 2025.”
While Roy expresses a “short-term positive bias on INTC shares,” particularly with the momentum of the Gaudi 3 AI accelerator (based on TSM N5), he acknowledges that the long-term outlook is more uncertain. He notes that Intel’s Gaudi roadmap will face increasing competition from Nvidia and AMD, as well as ongoing innovation by hyperscalers in workload-specific custom silicon.
All in, Roy remains on the sidelines for now with a Hold (i.e. Neutral) rating on Intel shares, while having no fixed price target in mind. (To watch Roy’s track record, click here)
Other analysts do have a price target and the average lands at $38.10, which implies a 22.5% upside from current levels. On the rating front, like Roy, most remain on the sidelines; the stock’s Hold consensus rating is based on a mix of 22 Holds plus 3 Buys and Sells, each. (See Intel stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
