What You Need To Know Ahead of Intel’s Earnings Report

Key Takeaways

Intel reports second-quarter earnings after the bell on Thursday.

Analysts expect the chipmaker to report a loss, widening from the prior quarter as research and development costs rise, after reporting a profit in the year-ago period.

Investors will likely be watching for updates on Intel’s outlook, as well as its foundry business and the company’s potential to benefit from artificial intelligence demand.

Concerns about elevated costs and competition from rivals have weighed on Intel’s stock price so far this year, though analysts suggested it could get a boost in the second half.

Intel (INTC) will report second-quarter earnings after the bell Thursday, with investors likely watching for updates on its outlook, as well as its foundry business and the company’s potential to benefit from artificial intelligence (AI) demand.

Analysts expect the chipmaker to report a loss of $448.05 million or 11 cents per share, widening from the prior quarter as research and development costs rise, after reporting a profit in the year-ago period. The company is projected to report revenue of $12.94 billion, which would be a slight decline from a year earlier.

Key Metric: Revenue Outlook

Investors will likely pay close attention to Intel’s outlook, after shares tumbled in the wake of its first-quarter report on the chipmaker’s weak revenue guidance. Bank of America analysts said at the time that Intel’s second-quarter guidance showed „topline growth remains lukewarm on limited AI exposure,” with „underutilized manufacturing and elevated costs.”

However, Melius analysts suggested earlier this month that the “AI laggard” could get a boost in the second half of the year, and benefit from its chips being used in Microsoft devices amid the tech giant’s AI push with Copilot+ PCs. The chipmaker may also benefit from seasonal trends in the industry, suggesting guidance for the third quarter could be stronger.

Analysts are projecting third-quarter revenue of $14.34 billion, according to consensus estimates compiled by Visible Alpha, which would represent a slight increase from the year-ago period.

Business Spotlight: Foundry Business and AI Gains

Worries about elevated costs, competition, and slower-than-expected progress in its foundry business have all weighed on sentiment surrounding Intel’s stock this year, though the chipmaker could be positioned to benefit from growth in its data center and AI segment as well as government support to promote the semiconductor industry within the U.S.

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Intel’s data center and AI segment helped drive revenue gains in the first quarter, though analysts noted Intel’s top line still depends significantly on „legacy” products, and foundry revenue fell. Intel reported foundry operating losses widened to $2.47 billion in the first quarter of 2024, raising concerns that it could take longer to scale and break even than previously anticipated.

Intel shares have lost nearly 40% of their value so far this year, at $30.83 as of Monday’s close.

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