Intel’s (INTC) Q4 results might have come in ahead of expectations, but that doesn’t necessarily mean a meaningful turnaround is already at play for the struggling chip giant.
Maximize Your Portfolio with Data Driven Insights:
- Leverage the power of TipRanks' Smart Score a data driven tool to help you uncover top performing stocks and make informed investment decisions.
- Monitor your stock picks and compare them to top Wall Street Analysts' recommendations with Your Smart Portfolio
The company’s revenue fell by 7.4% year-over-year to $14.26 billion but exceeded consensus estimates by $430 million. Within that total, Data Center and AI revenue reached $3.39 billion, surpassing Street expectations of $3.37 billion. The bottom line also outperformed, with adjusted EPS of $0.13 edging past forecasts by $0.01.
The outlook, however, painted a different picture. Q1 revenue is projected to range between $11.7 billion and $12.7 billion, with even the upper end falling short of analysts’ forecast of $12.86 billion. Similarly, adjusted EPS is expected to break even at $0.00, significantly missing the consensus estimate of $0.08.
With Intel still in search of a permanent CEO to succeed the ousted Pat Gelsinger, the earnings call was led by the interim co-CEOs. According to Cantor’s C.J. Muse, an analyst ranked among the top 3% of Wall Street stock pros, the tone was “balanced and realistic, highlighting the meaningful challenges ahead at Intel and the view that there are no quick fixes, unfortunately.”
Intel’s current product strategy involves prioritizing areas where it can deliver the most “differentiated value.” Key focuses include defending its dominant 70% share in the Client edge market against rising competition from AMD and ARM, with a strong push expected for its Panther Lake processor in the second half of the year. In the traditional Data Center market, AMD crops again, with Intel aiming to close the gap on its rival by “willing to fight for every socket using price.” Additionally, Intel is refining its AI Data Center strategy by streamlining its roadmap – Falcon Shores is now an internal test chip to support Jaguar Shores development – while exploring opportunities as host CPU for AI servers and CPU-based inference.
For Intel Foundry Solutions, the focus is on executing the 18A process with the goal being to achieve profitability by 2027 and beyond. “Obviously,” commented Muse, “big challenges that will take time.”
With asset sales allowing FCF to turn positive, Muse expects only a minor cash burn in 2025, however, that is not a real game-changer.
“Add it all up and the Intel turnaround continues but will be slow,” the 5-star analyst summed up.
As such, Muse rates Intel shares a Neutral, with a $22 price target, implying a 13% upside in the coming months. (To watch Muse’s track record, click here)
Most of Muse’s colleagues are keeping him company on the sidelines; the stock claims a Hold consensus rating, based on 25 Holds, 5 Sells and just a single Buy. Going by the $22.19 average price target, shares will appreciate by 14% over the one-year timeframe. (See Intel stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
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.
