Intel Corp. is set to report its first-quarter earnings after the market close on Thursday. The stock has risen 230% over the past 12 months, reaching its highest level since September 2000.
Wall Street analysts expect adjusted earnings per share of 1 cent—a 92% decline year-over-year—with revenue of $12.4 billion and gross margins below 35%.
The Rally’s Backdrop
The surge was spurred by a series of major catalysts:
- The US government’s $8.9 billion investment for a stake in the company
- A $14 billion buyback of a plant in Ireland
- Participation in Elon Musk's Terafab project
- A commitment from Google to use Intel processors
Intel's market capitalization has ballooned from $90 billion a year ago to approximately $340 billion.
Analyst Perspectives
"I think financial strength may still take time. I still expect some volatility, including some potential pullback."
— Hendi Susanto, portfolio manager, Gabelli Funds
"Consensus is actually saying that these shares are expensive… based on the current valuation, they’re expecting downside. The company needs to come out with guidance and earnings that are meaningfully higher in order to essentially move beyond the current expectations of what is priced in."
— Melissa Otto, head of technology, media and telecom research, Visible Alpha
Valuation at a Glance
Intel is trading at about 94 times expected earnings over the next 12 months—the highest multiple in the Philadelphia semiconductor index. For context:
- Arm Holdings: 93 times
- Nvidia: around 22 times