Factors Impacting Intel’s Q2 Results
Intel Corporation (INTC) is gearing up to unveil its second-quarter 2024 financials after the closing bell on Aug 1. Anticipation is rife as the tech giant is anticipated to report a surge in revenues from the Client Computing Group (CCG). This leap can be credited to the company’s unwavering focus on product innovation. Intel’s strides towards enhancing semiconductor manufacturing efficiency and fortifying the supply chain have also set the stage for potential success.
The CCG division, which constitutes a significant chunk of Intel’s total revenues, encompasses a spectrum of offerings ranging from computer CPUs to graphic products and server boards.
During the previous quarter, Intel proudly announced the optimization of over 500 AI models for its core Ultra processors. These AI models span various applications such as large language models, object detection, computing vision, and super resolution. The adaptability of these AI applications across different processing units within Intel’s Ultra Core processors, including CPU, GPU, and NPU (Neural Processing Unit), signifies the tech giant’s foothold in the nascent realm of AI-enabled PCs.
Eyeing to ship more than 40 million AI PC processors in 2024, Intel continues expanding its AI ecosystem to edge devices and PCs using Core Ultra processors. The support extended to over 100 software vendors corroborates the company’s growth trajectory in this domain.
Moreover, Intel’s recent introduction of the Lunar Lake architecture at Computex 2024 is poised to turbocharge Neural Processing Units and enhance AI PC performance significantly. Packed with advanced graphics and AI processing capabilities, Lunar Lake processors promise a substantial boost in device security, battery life, and power efficiency, signaling an optimistic outlook for revenue amplification in this segment.
Projected Future Revelations
The Zacks Consensus Estimate proposes revenues of $7.51 billion from the CCG unit, reflecting a climb from $6.78 billion in the corresponding period last year. Our internal forecast aligns closely with a revenue projection of $7.43 billion, denoting a noteworthy 9.7% year-over-year growth.
For the June quarter, analysts anticipate total revenues of $12.92 billion, marking a slight downturn from the equivalent period last year, which reported figures of $12.95 billion. The consensus estimate for adjusted earnings per share stands at 10 cents, hinting at a reduction from the 13 cents posted in the prior year.
Insight into Earnings Possibilities
Despite the positive outlook, our analytical model refrains from definitively forecasting an earnings beat for Intel during the second quarter. The symbiosis between a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) usually augurs well for an earnings triumph. However, this equation does not find resonance in this instance.
Revealing an Earnings ESP of +10.79%, the deviation between the Most Accurate Estimate and the Zacks Consensus Estimate paints a promising picture. The Most Accurate Estimate stands at 11 cents, whereas the Zacks Consensus Estimate lingers at 10 cents, intensifying the suspense surrounding Intel’s upcoming financial disclosure.
Charting Intel Corporation’s Price and EPS Path
Intel Corporation price-eps-surprise | Intel Corporation Quote
Doffing a Zacks Rank #4 (Sell), Intel finds itself amid a landscape brimming with opportunities and challenges.
Alternatives to Consider
As investors ponder over Intel’s impending earnings pattern, exploring other avenues might prove fruitful. Here are a few companies wielding a promising amalgam of strengths to potentially outshine this earnings season:
Fortinet (FTNT) is primed to unveil its quarterly numbers on Aug 6, boasting an Earnings ESP of +3.41% and a Zacks Rank #3. Meanwhile, BWX Technologies (BWXT) manifests an Earnings ESP of +0.88% and a Zacks Rank of 3, with its financial results slated for release on Aug 5. Watts Water Technologies (WTS), equipped with an Earnings ESP of +1.17% and a Zacks Rank of 3, is set to report its quarterly performance on Aug 7 – paving the way for a multi-layered investment outlook.
Experience these historical junctures in the confluence of tech and earnings as Intel embarks on its Q2 fiscal voyage.