Technology Stocks

Is Intel Corporation (NASDAQ:INTC) the Silver Lining Peeking Out from Behind the SMH Cloud?

Intel Corporation (NASDAQ:INTC) has climbed after beating quarterly expectations and boosting its guidance for the fiscal year. It was a standout because, when its earnings hit on Thursday afternoon, sentiment around the chip space was in the wastebasket, following key depressing reports by TXN, MKSI, and AMD, to name a few.

But INTC beat and raised. The semiconductor manufacturing giant reported above-consensus third-quarter earnings of $1.40 per share on an 18.7% year/year jump in revenue to $19.16 bln, which was also ahead of estimates.

Intel Corporation (NASDAQ:INTC) issued headline results that easily surpassed estimates while the company’s guidance was also upbeat.

The company expects above-consensus fourth-quarter earnings of $1.22 per share while fourth-quarter revenue is expected to be roughly $19.0 bln. The strong outlook prompted the company to increase its guidance for the full year.

The company now expects that earnings for the fiscal year will hit $4.53 per share, well ahead of previous guidance for earnings between $3.94 per share and $4.36 per share. Revenue is expected to reach $71.2 bln, which also represents an improvement from the previous forecast for sales between $68.5 bln and $70.5 bln.

Shares of the stock popped above the key $30 level on the news, retaking the 50-day moving average in the process.


The Bird’s Eye View

Intel Corporation (NASDAQ:INTC) bills itself as a company that designs, manufactures, and sells computer, networking, data storage, and communication platforms worldwide.

The company operates through Client Computing Group, Data Center Group, Internet of Things Group, Non-Volatile Memory Solutions Group, Programmable Solutions Group, and All Other segments.

Its platforms are used in notebooks, desktops, and wireless and wired connectivity products; enterprise, cloud, and communication infrastructure market segments; and retail, automotive, industrial, and various other embedded applications. The company offers microprocessors, and system-on-chip and multichip packaging products. It also provides NAND flash memory products primarily used in solid-state drives; and programmable semiconductors and related products for communications, data center, industrial, military, and automotive markets. In addition, the company develops computer vision and machine learning, data analysis, localization, and mapping for advanced driver assistance systems and autonomous driving.

It serves original equipment manufacturers, original design manufacturers, industrial and communication equipment manufacturers, and cloud service providers. Intel Corporation has collaboration with Tata Consultancy Services to set up a center for advanced computing that develops solutions in the areas of high-performance computing, high performance data analytics, and artificial intelligence.

The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 4% in that timeframe. That’s significant given the market context, which has been dominated by a heavy offer and margin calls for investors across the tech sector in the past week.

Perhaps most importantly, the company’s report offers hope that the dominant cycle in chips and processors may still have legs.

In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($12.2B against $17.6B, respectively). However, the liquidity and access to capital renders this immaterial.

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