The cocaine nose jobs of Wall Street are expecting Chipzilla to show that it did rather well in its fourth quarter tonight.
This will be the third strong quarter in a row and a J.P. Morgan upgraded the stock to overweight and setting a $40 price target. If that is right it would mean Chipzilla will grow more than 22 per cent from Tuesday’s closing price.
However that sort of thing would normally have been impossible with most analysts predicting that the PC market is doomed for at least another year or so.
Intel is expected report revenue of about $14.8 billion, compared with $14.7 billion in the year-earlier period. The company has topped consensus sales expectations in each of the last two quarters, according to FactSet.
Over CES we saw Intel waxing lyric about different ways its chips can be used in next-generation mobile products. Leading Wedbush analyst Betsy Van Hees was so impressed she said that Intel is “not just a PC company anymore."
“To our surprise, the foot traffic at Intel’s CES booth was consistently jam packed to overcapacity” with people viewing wearable products in health and fitness, laptops, tablets, drones, robots, as well as gaming and virtual reality demonstrations powered by Intel innards,” she said.
It will be the PC market which drags Chipzilla down. IDC reporting a 10.6 per cent quarterly decline for shipments during the holiday shopping season, the company in recent quarters has offset that weakness with growth in other areas such as data centres, the Internet of Things and enterprise storage.
Last year Intel bought Altera last year for $16.7 billion to help boost that business further, and J.P. Morgan said the outfit had worked wonders on Intel’s data centre and Internet of Things businesses.
Last quarter, revenue within the data centre business grew 12 per cent to $4.1 billion, thanks in large part to a huge shift in cloud-computing technologies and services.
About the only analyst with something bad to say about Intel is Raymond James analyst Hans Mosesmann. He thinks it will underperform. While fourth-quarter earnings may be in line with expectations, data centre group sales may start to decelerate in the quarters ahead.
