Intel Corp.âs upcoming earnings report is expected to be a busy one as the chip maker discusses trends in the personal-computing and data-center markets, as well as the budding opportunity in artificial intelligence.
The results, due out Thursday after the closing bell, come as Intelâs stock
INTC,
has enjoyed a sharp 50%-plus move higher since the company last presented its numbers to Wall Street.
Read: Missed the boat on AMDâs stock surge? Why this analyst says youâre not too late.
That rally âhas raised the bar on expectations,â HSBC analyst Frank Lee wrote in a recent report.
âWe acknowledged Intelâs improving execution especially on its PC client side with its improving market share,â Lee continued, and he thinks the companyâs revenue and gross margins for the latest period will fall roughly in line with the consenus view.
At the same time, he sees âlittle room for further earnings upside in the near-termâ given recent expansion in the stockâs price-to-earnings multiple.
Hereâs what to watch for in the fourth-quarter numbers.
Donât miss: Intelâs âmake-or-break yearâ will put stockâs recent surge to the test
What to expect
Earnings: The FactSet consensus calls for 45 cents in adjusted fourth-quarter earnings per share, compared with 10 cents in the year-earlier period.
Revenue: Analysts tracked by FactSet expect that Intel generated $15.2 billion in revenue for the fourth quarter, compared with $14.0 billion in the year-prior quarter.
Consensus estimates call for a 28% bump in revenue, to $8.5 billion, for Intelâs client-computing unit, which is its biggest. Data-center and AI revenue is forecast to decline about 5% to $4.1 billion.
Stock movement: Intel shares have gained after each of the companyâs past three earnings reports, including when they logged a 9% increase after the most recent one. The stock is up 68% over the past 12 months, and itâs gained 52% over the past three months.
Of the 42 analysts tracked by FactSet who cover Intelâs stock, nine have buy ratings, 27% have hold ratings, and six have sell ratings, with an average price target of $44.04 thatâs about 12% below recent levels.
What else to expect
HSBCâs Lee will be watching the companyâs commentary on the PC business. âIn particular, we believe there could be some downside risk to bullish consensus expectations of its PC client sales of [$7.7 billion] based on recent weakness in the overall PC supply chain,â he wrote.
Executives could discuss the market for AI PCs, which Intel has been betting on.
âFor the PC [total addressable market] beyond [the fourth quarter], we see the introduction of AI PCs with Meteor Lakeâs recent debut (followed by Arrow Lake, Lunar Lake, and Panther Lake as a follow-on in 2025) as well-positioned, as client-side inference workloads grow in importance,â TD Cowenâs Matthew Ramsey wrote.
As for AI in general, Bernsteinâs Stacy Rasgon said this is the year that investors will start to see âif there is anything really behind the companyâs AI narrative.â
âAt this point it still seems incremental (at best); the company has suggested [roughly $2 billion] in [the] Gaudi pipeline, but we still have no real good idea as to how much of that pipeline is committed, or anything really on timing (and $2B is small given Intelâs size),â he continued.
Meanwhile, Wolfe Research analyst Chris Caso said he saw the potential for some risk to Intelâs first-quarter figures, âthough thatâs also more about poor modeling than deteriorating conditions.â
See also: Nvidia is no longer Morgan Stanleyâs top chip pick. A much different name is.