Intel’s Q3 earnings report is about to be launched on October 23. The earnings report could have a major affect on the inventory, as it’s going to reveal the extent to which the corporate has managed to stabilize its losses.
The corporate reported stagnant income in Q2 of $12.9 billion yr over yr, however extra importantly, it reported a internet lack of $2.9 billion. Intel’s most vital drawback is its fabs, that are shedding cash, with greater than $13 billion in losses within the final 4 quarters alone.
The corporate is betting that its new Panther Lake collection of CPUs, which is able to begin promoting in January, will allow a turnaround.
Intel’s testing signifies that we will anticipate greater than 50% higher CPU and GPU efficiency, in addition to greater than 40% decrease energy utilization, at an analogous single-threaded efficiency in comparison with Lunar Lake or Arrow Lake-H.
One cause, if not the first one, for these efficiency and power-efficiency good points is Intel’s use of its 18A manufacturing course of (node) for making the chips. Intel is hoping the success of Panther Lake chips will appeal to prospects to its fabs.
Intel wants prospects to avoid wasting its fabs.
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Money infusions into Intel aren’t sufficient
Intel’s (INTC) inventory gained 102% in worth during the last six months.
These good points are as a result of firm securing investments, starting with SoftBank’s $2 billion stake. The U.S. authorities plans to hurry up the fee of $8.9 billion in funding already pledged to the corporate, and Nvidia will make investments $5 billion.
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A few rumored offers boosted the inventory. Whispers prompt that Intel is trying to make a take care of Apple and AMD to make use of its fabs.
One other fairly absurd and refuted rumor claimed Intel was attempting to make a take care of Taiwan Semiconductor Manufacturing Firm (TSMC) to put money into it.
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If Intel may persuade AMD or Apple to make use of its fabs, which may save the corporate, nevertheless it hasn’t occurred but. Intel hasn’t but disclosed the yields on its 18A node, and that could be the issue.
The state of affairs could be altering for the higher, as SemiAccurate reported that Intel Foundries will manufacture Microsoft’s Maia 3 chip codenamed “Griffin” utilizing the 18A or 18A-P course of, in keeping with TechPowerUp.
Bernstein analyst updates outlook on Intel inventory earlier than earnings
Stacy Rasgon stated Intel will face essential challenges heading into 2026.
He famous that Intel raised roughly $16 billion in money, strengthening its stability sheet. This, nonetheless, led to share dilution and an rising dependence on one-time offers.
Rasgon thinks Intel’s issues have not modified; it’s nonetheless shedding market share in each consumer and server chips, and its manufacturing technique is unclear.
In keeping with him, Wall Road’s forecasts for subsequent yr are too excessive, as many analysts have not accounted for the affect of Intel’s Altera divestiture, which may decrease quarterly income by roughly $1.6 billion, as reported by TipRanks.
Rasgon commented on Intel inventory good points, writing: “The real bull case right now seems to be that Trump wants the stock to go up.”
He reiterated a market carry out score with a worth goal of $21. With this goal, a maintain score appears odd, as the present inventory worth is about $38.
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Financial institution of America analyst Vivek Arya and his crew not too long ago expressed a unique opinion. The crew stated: “Even if Intel Foundry maintains its internal customer AND potentially lands substantial external customer revenue [in the range of $5 billion to $10 billion], we estimate the foundry to remain unprofitable on both gross-profit and operating-profit bases by [calendar year 2027 estimates].”
Arya downgraded the inventory from impartial to underperform, with a goal worth of $34, primarily based on 3.3 a number of of his enterprise worth to gross sales ratio estimate for 2026, in keeping with the historic vary of 1.7 to 4.
They famous draw back dangers:
- Decrease than yield/ramp at Intel Foundry, notably for its new 18A and upcoming 14A nodes
- Lack of fabric exterior foundry buyer in wafer processing
- Weaker-than-expected developments in a mature PC market
- Accelerated share loss to main CPU rivals
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