Intel Corporation

Intel Corporation (NASDAQ: INTC) is engaged in designing and manufacturing of semiconductors. It operates through three segments: Intel Products, Intel Foundry, and All Other. Its Intel Products segment includes Client Computing Group (CCG), Data Center and AI (DCAI), Network and Edge (NEX).

Key Business & Financial Updates

• Financial Performance and Restructuring Impact: Intel Corporation reported third-quarter 2024 revenue of USD 13.3 billion, which exceeded the midpoint of prior guidance. However, financial results were significantly impacted by restructuring and impairment charges, leading to a GAAP earnings per share (EPS) loss of USD (3.88) and non-GAAP EPS loss of USD (0.46). The quarter included USD 15.9 billion in impairment charges and USD 2.8 billion in restructuring costs, which primarily arose from accelerated depreciation of manufacturing assets, goodwill impairments, and valuation allowances on deferred tax assets. These charges reflect Intel’s ongoing transformation efforts to streamline operations and improve long-term financial sustainability.
• Cost Reduction and Strategic Restructuring: Intel made substantial progress on its USD 10 billion cost reduction plan, aiming for completion by 2025. The plan focuses on operational efficiency, agility, and creating capacity for strategic investments in technology and manufacturing leadership. Restructuring measures in Q3 2024 included workforce reductions, portfolio realignment, and capital expenditure adjustments, resulting in USD 2.8 billion in charges. While these actions impacted short-term profitability, they are expected to drive long-term operational resilience. CFO David Zinsner highlighted that these steps enhance liquidity and position the company for future profitability.
• Innovations in Business Units: Intel continues to innovate across its business segments, leveraging advancements in AI and semiconductor technology. In the Client Computing Group (CCG), Intel maintained leadership in AI PCs, launching the Intel® Core™ Ultra 200V and 200S series processors, which deliver improved performance, battery life, and AI capabilities. The Data Center and AI (DCAI) segment launched Intel® Xeon® processors and Gaudi® 3 AI accelerators, doubling performance over prior generations and addressing enterprise AI demand. The Network and Edge (NEX) segment achieved significant design wins, such as KDDI’s adoption of Samsung’s vRAN 3.0 solution powered by 4th Gen Intel® Xeon® Scalable processors.
• Intel Foundry and Industry Collaborations: Intel is advancing its foundry business transformation to align with industry needs. The company announced plans to establish Intel Foundry as an independent subsidiary, enabling greater transparency and flexibility for external foundry customers and suppliers. This move also allows Intel to optimize the capital structure and explore independent funding sources. Additionally, Intel’s collaboration with Amazon Web Services (AWS) includes the development of new custom Xeon and AI fabric chips, reinforcing its leadership in cutting-edge semiconductor technology. The company also secured USD 3 billion in CHIPS Act funding to strengthen domestic semiconductor manufacturing.
• Outlook for Q4 2024: For the fourth quarter of 2024, Intel projects revenue between USD 13.3 billion and USD 14.3 billion. The company anticipates gross margins of 36.5% (GAAP) and 39.5% (non-GAAP), with corresponding EPS guidance of USD (0.24) and USD 0.12. Intel remains focused on its strategic priorities, including achieving cost reductions, advancing process technologies, and driving product innovation. CEO Pat Gelsinger emphasized the company's commitment to creating sustainable value by simplifying its portfolio and leveraging opportunities in AI and foundry services.
• Long-Term Strategy and Transformation: Intel’s efforts to reshape its operating model and improve cost efficiency are part of a broader strategy to enhance long-term competitiveness. By aligning its business segments, advancing its Intel 18A process node, and fostering industry collaborations, Intel is positioning itself for growth in emerging markets, including AI and high-performance computing. While financial challenges persist in the near term, Intel’s strategic initiatives reflect its focus on maintaining leadership in the semiconductor industry and delivering value to stakeholders.

Technical Observation (on the daily chart):

The Relative Strength Index (RSI) over a 14-day period stands at a value of 49.77, downward trending, with the price near an important support zone of USD 20.00-USD 22.00, with expectations of some support if these levels sustain. Additionally, the stock's current positioning is between both 50-Day SMA and 200-Day SMA, which can act as a short to medium term support and resistance levels respectively.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is December 02, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.