:max_bytes(150000):strip_icc()/GettyImages-12466775221-5211a828b7bd43a38523891f849e9b31.jpg "What You Need To Know Ahead of Intel’s Earnings")
Key Takeaways
- Intel is set to announce its fourth-quarter earnings Thursday, with investors likely to focus on the chipmaker’s foundry business and sales figures for recently launched processors.
- Last quarter, Intel reported significant revenue growth for its foundry business, driven by the artificial intelligence (AI) boom that analysts say could continue bring gains.
- Shares of Intel and those of competitors in the semiconductor industry could benefit from signs of growing demand for AI.
Intel (INTC) is set to announce its fourth-quarter earnings Thursday, with investors likely to focus on the chipmaker’s foundry business and sales figures for recently launched processors. They will also will be looking for insights on Intel’s strategy to capitalize on the artificial intelligence (AI) boom.
Analysts project that Intel’s revenue will be around $15.17 billion for the latest quarter, up from the previous quarter and the same period in 2022, according to estimates compiled by Visible Alpha. Net income is expected to be at nearly $1 billion, up sharply from $310 million the previous quarter and a loss of $661 million in the fourth quarter of 2022.
| Analyst Estimates for Q4 2023 | Q3 2023 | Q4 2022 | |
| Revenue ($B) | 15.17 | 14.16 | 14.04 |
| (Diluted) Earnings Per Share ($) | 0.45 | 0.41 | 0.10 |
| Net Income/Loss ($B) | 0.96 | 0.31 | -0.66 |
Key Metric: Intel Foundry Services
Back in October, Intel shares surged after the chipmaker reported that its foundry business revenue quadrupled in the third quarter from a year earlier. Intel Foundry Services (IFS), which manufactures chips for corporate and government clients, generated $311 million in revenue in the third quarter of 2023, a 299% increase from the same period the previous year.
Analysts project IFS revenue to rise to $343 billion in the fourth quarter, according to consensus estimates compiled by Visible Alpha. The company and analysts alike have indicated that IFS could represent an opportunity for long-term growth for Intel amid the AI boom.
Business Spotlight: AI Optimism Driving Chipmakers
In the fourth quarter of 2023, the company introduced a family of Intel Core Ultra processors designed to run AI workloads locally on a PC. The chipmakers’ latest AI-optimized offerings could help Intel compete with Nvidia (NVDA) and Advanced Micro Devices (AMD), while making AI tech more accessible to consumers.
The semiconductor industry at large is projected to see significant growth in 2024, according to Bank of America Securities analysts, who named Intel a “top pick.”
The Biden administration’s CHIPS Act grant, which is meant to encourage semiconductor manufacturing in the U.S., could also “most benefit” Intel compared with competitors, the analysts added.
Intel shares nearly doubled in 2023, in part driven by AI optimism, outperforming the S&P 500 and keeping pace with some of the best-performing “Magnificent 7” stocks like Tesla (TSLA) and Meta (META).
Experts don’t expect a slowdown in gains for AI-related stocks anytime soon, as just last week the S&P 500 index hit a record high, “led by a rally in chipmakers and big tech firms,” UBS analysts wrote. The firm’s analysts added that “with AI set to remain the key theme driving global tech stocks again this year and the rest of the decade, we maintain our preference for the semiconductor and software sectors and see opportunities in those involved in memory and AI edge-computing.”