Intel Q4 earnings forecast: after the stock price soared 20% in a short time, the company’s prospects improved?


Related news: Intel CEO changes
Intel’s (NASDAQ: INTC) earnings today may be different from usual. Earlier, the company announced the appointment of a new CEO to speed up business restructuring and shorten the time for chip upgrading. There is speculation that the company may follow its smaller competitors and outsource production.
Intel last week ousted Bob swan, its chief executive, and named Pat Gelsinger, a former VMware chief executive, as its new CEO. The appointment will take effect on February 15.
Last year, Intel ceded the title of “America’s most valuable semiconductor company” to NVIDIA. Because the company has failed to mass produce more advanced chips than its competitors, which have outsourced most of their production to TSMC. However, the setbacks in Intel’s production directly led to its competitors taking market share, which also brought huge losses to Intel’s shareholders.
Over the past year, while other manufacturers have benefited from soaring demand and their share prices have soared, Intel’s share price has not budged and, in fact, has fallen by more than 3%. During this period, NVIDIA’s market value more than doubled.
After these failures, Intel is trying to reverse its direction. The Santa Clara based company says it will update its November production plan to investors soon, and the market will see if it really starts outsourcing production.
At the same time, Intel will face its biggest crisis in a decade, that is, the dissatisfaction of rights investor Dan Loeb, who has established a large number of Intel positions and is now urging the company to explore strategic alternatives, package and sell some assets and realize production outsourcing.
(Intel weekly chart from Yingwei Finance) )
The involvement of Dan Loeb and the appointment of a new executive triggered a 21% jump in Intel’s share price in the past month to close at $57.99 yesterday. Since then, at least six brokers have upgraded the stock.
John Moore, an analyst at Morgan Stanley, said after Intel appointed a new CEO last week: “he has worked at Intel for 30 years, including as chief technology officer, and then in charge of VMware. In Intel’s current situation, he is more experienced than any candidate.”
In the report, the analyst raised the stock’s rating from “holding wait-and-see” to “overweight” and raised its target price from $60 to $70.
Despite the strong optimism, Intel has no quick solution in the current situation. Even after the company decides to outsource its manufacturing business, it still needs time to catch up.
In its recent earnings report, Intel tried to convince investors that it has made considerable progress in the 7Nm manufacturing process. However, TSMC is already far ahead, and it is planning to launch 3nm chips in bulk in the second half of 2022.
Intel’s poor performance, in our view, also provides an opportunity for long-term investors to build positions. With the appointment of a new leader with a strong technical background and the participation of active investors, the prospect is brighter, and these changes may start the reversal of its share price.