For a while, things weren’t looking good for Intel (NASDAQ:INTC). With PC use down among regular users and businesses reconsidering whether they really needed new terminals this year, Intel’s sales were troubled. At least, they were until help arrived from fellow tech stock Nvidia (NASDAQ:NVDA), who revealed a new connection to Intel to send the stock ramping up nicely in Wednesday afternoon’s trading.
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Intel had plenty of good news for shareholders, thanks to a recent TD Cowen conference where Intel revealed its revenue would likely reach the upper end of its previously-announced range guidance. Intel is looking for between $12 billion and $12.5 billion in revenue, compared to its earlier range was $11.5 billion to $12.5 billion. Intel also expects no “near-term weakness” thanks to a growing GPU pool.
The biggest reason for this improvement seems to trace back to Nvidia, who revealed that Intel’s test chips for Nvidia chips are looking quite solid. That improves the likelihood that Intel will wind up manufacturing at least some of Nvidia’s chips in the future. That also may explain why Intel isn’t looking for GPUs to produce a lot of weakness in its bottom line: Intel will likely have a stake in the GPU manufacturing game and replace any of its losses with a new revenue stream.
The news comes at an excellent time for Intel, which is suffering under the weight of analyst concerns. Currently, analyst consensus calls Intel stock a Hold, with five Buy ratings against four Sells and 17 Holds. Furthermore, with an average price target of $31.02, it offers investors 2.85% downside risk.
