- Intel stock is seeing its best performance in some time.
- INTC shares rose 8% on improved fourth-quarter guidance.
- Intel failed to turn a profit with a loss of -$0.46 in the third quarter
- Artificial intelligence and edge computing contributed to revenues.
Intel (INTC) the company’s shares rose more than 8% on Friday after the troubled legacy semiconductor maker announced significant progress on a plan to cut $10 billion in costs in 2025 while reporting third-quarter results.
Intel didn’t turn a profit, but the market is rewarding INTC stock due to its improved fourth-quarter outlook and improved third-quarter earnings.
The Dow Jones Industrial Average (DJIA)of which Intel is its smallest weight, gained over 0.8% at the end of the session. This put the Dow Jones index neck and neck with the NASDAQ. Both indices also benefited greatly Amazon (AMZN) also increased by over 6%.
Intel stock news
Intel lost third-quarter adjusted earnings by -$0.46 per share, a whopping 43 cents less than the Wall Street consensus. GAAP EPS was even worse at -$3.88, but that figure was based on $15.9 billion in impairment charges and $2.8 billion in restructuring charges.
But traders largely focused on Intel, which posted third-quarter sales of $13.28 billion, $240 million above the consensus and 6% less than a year earlier.
Intel generated $7.3 billion in sales within the Client Computing Group, slightly below the consensus. Data center and AI revenues reached $3.35 billion, up 9% year-over-year. Sale through spin-off acquisition Mobileye (MBLY) exceeded USD 485 million. The Network & Edge unit reported sales of $1.5 billion, up 4% year-over-year, while revenue in the company’s foundry segment fell to $4.4 billion, down 8% year-over-year .
Over the summer, Intel announced that it planned to lay off about 15% of its workforce in a major cost cut. Investment delays in the foundry division were also recently announced to keep costs under control as the company moves towards a more classic structure with in-house design and manufacturing capabilities.
“Our third-quarter results underscore the significant progress we are making compared to the cost reduction plan we outlined last quarter,” CEO Pat Gelsinger said in a statement. “The momentum we are building across our product portfolio to maximize the value of our x86 franchise, combined with the strong interest Intel 18A is generating among foundry customers, reflects the impact of our activities and future opportunities.”
Looking ahead to the fourth quarter, Gelsinger and company projected sales to average $13.8 billion above the $13.66 billion previously mentioned by Wall Street analysts. Management also projected adjusted EPS of $0.12, approximately 50% above consensus, and adjusted gross margin of 39.5%.
Morgan Stanley’s Joseph Moore was unimpressed, saying the market reaction showed “how low expectations had become because the quarter was unremarkable and the sense that they would stay the course was clear by mid-quarter.”
Despite the criticism, Moore raised his $25 price target to $25.58. Evercore ISI analyst Mark Lipacis raised his price target by a dollar to $26. Both analysts maintained that they needed to see more progress at the foundry to recommend the stock.
Intel stock forecast
Intel stock still needs to clear the $24.90 support-turned-resistance level that we at FXStreet have been talking about for months. A good sign is that the Relative Strength Index (RSI) is finally breaking above the neutral 50 line, which means some momentum is emerging. But most of them are based solely on earnings. On Thursday, the RSI was 41, but it looks like the week will end around 55.
Support remains at $19.00 based on the selloff and price action in August and September.
INTC stock daily chart
