Intel presented strong reports; The stock jumps sharply in late trading

At this time, Intel shares are up 20% in early trading on the Nasdaq.

One of the most encouraging data is related to Intel’s recovery precisely in the important areas. While growth in the personal computer business was only 1%, Lip-Bo Tan’s effort in the field of server farms is bearing fruit with a sharp increase of 22% in revenue to 5.1 billion dollars. This figure makes it easier for the key customers that Intel wanted – Nvidia, Broadcom or Google – to manufacture their important chips, mostly server chips, precisely on Intel’s production lines.

Perhaps the most encouraging figure, apart from the significant improvement in gross profit to over 40%, is the forecast for the current quarter – which stands at 13.8-14.8 billion dollars, an average improvement of 1.4 billion dollars compared to the corresponding quarter.

On the other hand, the production activity for external customers, Intel’s most strategic field, remained loss-making, with a quarterly loss of 2.4 billion dollars, but for the first time the revenues in the field crossed the 5 billion dollar mark, and they are also an encouraging figure – because they prove that the company is increasing the revenues from the field, without increasing the losses in it.

Intel stock has surprisingly become one of the fastest growing technology stocks of the past year – up 225% for the year and 81% since the beginning of the year. For comparison, Nvidia’s stock has grown by only about 9% since the beginning of the year.

“Too big to fall”

Behind the increases is the general belief that Intel is on a positive trend following the inauguration of Lip-Bo Tan and investment by Nvidia, Softbank and the Trump administration in the company – which is now seen as “too big to fail”, a strategic asset that will receive the protection of the administration at any cost, and its encouragement to become a worthy competitor to the Taiwanese TSMC in the production of cloud computing and AI processors. At the same time, Tan Harish is making deep cuts that will shed about 20,000 jobs in the company, shake up layers of managers and encourage many to take early retirement.

In the last month, Intel received a positive momentum of announcements: it bought back its share in the factory in Ireland from the private equity fund Apollo; won the trust of Google, which said it would buy chips from it; And last week it got a boost from Elon Musk who promised to integrate Intel into his future chip factory, “TerFab” which will produce processors for Tesla cars and taxis, SpaceX spacecraft and xAI servers. In the last day, Musk introduced Tesla as the first customer of the A14 chips, the flagship product of Intel’s new chip factories, which are supposed to compete with TSMC’s production lines. The earlier-generation chip, 18A, launched last year, received positive reviews, although it has yet to win production customers in the AI ​​field, but is currently focused on Intel’s PC processors.

fear of “excessive rise”

However, many analysts pour cold water on the rosy forecasts and fear an excessive increase in the share price. Of the eight analysts monitored by Visible Alpha, six have a neutral recommendation, with only one holding a sell rating and another a buy rating. In the review of the core processor market published by Bank of America last week, it appears that the competitor AMD is in the best competitive position “thanks to a strong roadmap for processors and a dominant presence in cloud services, while the recent jump in the value of Intel’s company is excessive in relation to its components. The bank’s analysts maintain the recommendation of “underperform”.