Intel Trading forecasts and signals

Intel's financial results continue to keep investors in suspense regarding the future prospects of the developer. Fortunately for the chip manufacturer, the shortage in the chip market persists, because in a "normal" situation, it continued to lose its share in favor of more efficient competitors.The company's revenue in the second quarter increased by 2% y/y due to the ”success" of the Client Computing Group-the direction that is responsible for computing power solutions. While the data center segment suffered significantly due to good sales of AMD's 7-nm Eypc 3: revenue decreased by 9% y/y, to 66.5 billion, and operating profit by 37%, to $1.9 billion. It is quite obvious that AMD managed to beat Intel: over the same period, the revenue of the newcomer firm increased by 87%. At the same time, analysts predict a doubling of AMD's market share to 25% already in 2022.The forecasts of Intel representatives themselves are quite pessimistic: in the third quarter, revenue should slightly decrease compared to last year's values to $18.2 billion. If earlier the amount of income for 2021 was expected in the range of $72.5-72.84 billion, now it is near $73.5 billion. The nuance is that in the second quarter, the company managed to ”surprise" investors and demonstrate a result of $0.7 billion more. And this figure alone was enough to increase the forecast values to $73.54 billion, which means that the figures in the following quarters will continue to disappoint market ...

The market on the eveOn July 23, the US stock exchanges ended trading in the green zone. The S&P 500 rose by 1.01% to 4,411 points, the Nasdaq added 1.04%, the Dow Jones rose by 0.68%. Representatives of the communications services sector (+2.65%), as well as utilities (+1.28) remained the leaders of growth. The energy sector was trading worse than the market, which fell by 0.43%.Company news:Shares of Moderna (MRNA: +7.8%) reached record levels on the news about the permission for vaccination of children over 12 years old received from the EU regulator.The quotes of the consulting firm Robert Half (RHI: +7.3%) rose after the publication of a strong quarterly report: the company's revenue significantly exceeded forecasts.Intel securities (INTC: -5.3%) were under pressure from the deterioration of forecasts for the next quarter due to a shortage of chips.ExpectationsThe chief infectious disease specialist of the United States, Anthony Fauci, warned of the risk of new outbreaks of COVID-19 in states with a low level of vaccination due to the spread of the delta strain. A difficult epidemic situation is developing in Florida, which accounts for about 20% of newly detected infections. At the same time, the incidence does not yet exceed 350 cases per 100 thousand of the population with an insignificant mortality rate. The situation with the next wave of the epidemic does not cause serious concerns among investors.The dynamics of trading today will be determined by the expectations of important events for investors. The quarterly reporting season is in full swing. This week, Apple, Microsoft, and Amazon will present their results. It is possible that they will be able to exceed the expectations of investors. As of today, about a quarter of the companies included in the S&P 500 have reported, and 88% of them have earnings per share higher than forecast.The focus will also be on the FOMC meeting scheduled for July 28. However, the investment community does not expect important news from the Fed this time. Today, in our opinion, the market will be dominated by negative dynamics after the positive of last Friday.Asian stock markets closed mainly in the red zone. Hong Kong's Hang Seng fell 1.50%, China's CSI 300 fell 3.22%, although Japan's Nikkei 225 rose 1.04%. EuroStoxx 50 loses 0.85%.Risk appetite is weak. The yield of 10-year treasuries is 1.28%. The price for Brent futures rose to $74.1 per barrel. Gold is trading near $1801 per troy ounce.We expect that the S&P 500 will hold the upcoming session in the range of 4380-4420 points.MacrostatisticsThe monthly report on new home sales for June will be published (forecast: growth of 4% m/m after a decline of almost 6% m/m in May).Technical pictureTechnically, the S&P 500 continues to move in a long-term uptrend. On the eve of the broad market index reached a new high. The trading week ended above a significant resistance at the level of 4,400 points, and this was a positive signal. The RSI and MACD indicators indicate the likelihood of continued growth in the coming trading sessions, although a small technical pullback after a four-day rally is not excluded. The nearest target for the S&P 500 is 4450 points.Point of viewOn July 27, Microsoft (MSFT) will report for the second quarter. According to the consensus forecast of Factset, the corporation's revenue will grow by 16%, to $44.13 billion, non-GAAP EPS will increase by 30.8%, to $1.91. We believe that the Productivity and Business segment will be among the key drivers of financial performance growth due to the continued steady demand for cloud application solutions (Office 365 and Dynamics 365), as well as the positive situation in the online advertising market (LinkedIn). In addition, due to the active increase in demand for Azure cloud computing services, we expect very strong results from the Intelligent Cloud segment. We believe that the focus of investors ' attention will be forecasts for the next quarter and the rest of this year. Of particular interest are the margin indicators and expectations related to its prospects. Adobe and Oracle, which reported earlier, indicated an increase in operating expenses and investments.Also this Tuesday, the Alphabet (GOOGL) report for April-June will be published. The general market consensus assumes revenue growth by the maximum 46% y/y since 2028. The optimistic forecast is based on the effect of a low base (in the second quarter of last year, the Internet giant's revenue decreased by 1.7%) and is supported by favorable conditions in the online advertising market. The latter factor has already been reflected in the quarterly reports of Snap and Twitter. The focus is also on the results of the Google Cloud segment. Its revenue is expected to increase by 50% y/y, the most important metric for investors will be marginality, which has been negative so far. We believe that the actual results of Alphabet will exceed consensus forecasts, but the reaction of investors to the release may be ambiguous. Based on the analysis of the options market, we do not exclude the tendency to fix positions.On July 26, after the closing of the main trading, the quarterly reports will be presented by Tesla Inc. (TSLA). The FactSet consensus assumes a twofold, up to $11.5 billion, revenue growth year-on-year with an increase in EPS (according to GAAP) from $0.10 to $0.55. The volume of production and supply of electric vehicles in the reporting period increased by 15% and 9% q/q (2.5 times and 2.2 times y/y), respectively, for the first time in the company's history exceeding 200 thousand units. With this in mind, we are counting on Tesla's strong financial results for April-June. Management's comments on compliance with the guidelines, the situation with the shortage of chips, as well as operations with digital currency will be ...

Intel reported for the 2nd quarter of 2021.  The results on revenue and profit exceeded analysts' expectations and the company's forecast:Revenue: $18.53 billion (+2% y/y) against the forecast of $17.8 billion.EPS: $1.28 (+12% y/y) vs. forecast of $1.07The business situationSales in the processor manufacturing segment, which accounts for 55% of the company's total revenue, increased by 6% y/y.On the contrary, the revenue of the second most important segment related to data processing centers (data centers) decreased by 9% y/y. The share of this direction in the total revenue structure of Intel is about 35%.Last quarter, Intel reported a 20% drop in revenue in the data center segment. Thus, the rate of decline slowed down, but it was not possible to stop it. Investors will continue to closely monitor this particular segment of the company's business, since its reduction is the result of the competitive advantages of other industry players.  Plans and forecastsIntel management assures that the situation in the data center business is gradually normalizing and the results will be better in the second half of the year, as the company is making every effort to win back the market from competitors.Intel also raised its forecast for 2021 for adjusted revenue by $1 billion. Now the company expects that by the end of the year the figure will be $73.5 billion, and earnings per share — $4.8.  In the 3rd quarter, Intel forecasts revenue of $18.2 billion, and earnings per share of $1.1. At the same time, the gross profit margin is expected to be 55%, which is significantly lower than the 59.2% that the company showed in the 2nd quarter.  Analysts' opinionAll the risks specified in this analysis remain valid. Yes, Intel is estimated by multipliers cheaper than its rivals, but so far the company has not managed to turn the situation in the market in its favor. The results of the next two quarters will be very important for Intel and its ...

Intel ended the first half of the year with a net profit of $8.4 billion, which is 22% less than a year ago. Earnings per share decreased by 44 cents year-on-year to $2.06. Intel's revenue also showed a negative trend. It decreased by 1% in the first six months of this year to $39.3 billion. Statistics for the second quarter showed a decrease in net profit by 1% to $5.1 billion. At the same time, earnings per share increased by 5 cents to $1,24. Quarterly revenue decreased to $19.6 billion, or 0.5%. The company has revised its annual forecast to improve. Now it expects that revenues by the end of 2021 will reach the amount of $77.6 billion, which is $0.6 billion more than the previous forecast. The forecast for earnings per share was increased by 9 cents to $4.9. According to the results of the current quarter, revenue in the amount of $19.1 billion will be received. Quarterly earnings per share are expected at ...

According to the publication, this could be the "largest acquisition" for the company.The American Intel Corporation is considering the possibility of acquiring GlobalFoundaries, a company that produces semiconductor chips, for $30 billion. This was reported on Thursday by the electronic version of The Wall Street Journal newspaper.According to her sources, Intel is consulting on the possibility of this transaction. GlobalFoundaries is based in the United States and is currently owned by one of the investment funds of the Government of the Emirate of Abu Dhabi.According to the publication, this could be the "largest acquisition" for Intel. Final agreements have not yet been reached, it is possible that the transaction will not follow. In this case, GlobalFoundaries is expected to proceed to the previously planned initial public offering procedure.According to the publication, Intel expects that this transaction will allow the corporation to increase the volume of deliveries of microchips to other manufacturers. Founded in 1968, Intel produces electronic devices and computer components, including microprocessors. The company's turnover for 2020 exceeded $77 ...

AMD's share price plunged 20% amid exaggerated fears that Intel could recover from recent losses in the semiconductor market.If Intel has changed the CEO and is just preparing to present a rethought schedule for the release of new products, then AMD already has a detailed development strategy. Recently, the launch of Zen 3 CPU for servers took place, and next year 5-nm Zen 4 will be released. At the same time, investors for some reason fear for possible competition from the former market leader. In fact, Intel may well stop producing new chips altogether, as they are significantly inferior in terms of the characteristics of the products of other players.The new CEO of Intel manages the company only for a month, a week of which he spent on vacation. This time was hardly enough for a qualitative rethinking of technological processes and building a new strategy to avoid further loss of the market.On the other hand, AMD representatives report that the release of new products will further increase the company's share in the server hardware market. Consumers are not ready to wait several years for new devices from Intel. Competition in the technology sector is extremely high: outdated equipment can deprive developers of an advantage and hurt revenue. By 2023, Wall Street expects AMD's revenue to grow by $2.8 billion and Intel's by $1.5 billion. There are no serious reasons for revising AMD's leading positions ...

Shares of Advanced Micro Devices are trading 9% higher than the values of the beginning of 2021. Previously, many investors were worried that the company's growth rate could slow down under the influence of a price war with a larger manufacturer Intel, but it is already becoming clear that this confrontation does not pose a special threat to financial results. The recent correction and the fall of the AMD price below $100 looks like a good reason to open a long-term position. The main problem with Intel's attempt to arrange dumping is that data centers, which account for a solid part of sales, are unlikely to make purchasing decisions based on a short-term price reduction. In order for this strategy to work, Intel will have to keep prices low for a long time, which will negatively affect profitability. And let's not forget that the company has yet to convince customers of its capabilities to create more efficient devices, as well as provide an adequate plan for the release of new products, which has not been done for a very long time. As long as AMD technologies continue to dominate, there is no need to worry about its future. According to Omdia, following the results of the second quarter, AMD managed to increase its share in the server equipment market to the maximum values since 2006 – 15%. The figures from Mercury Research are somewhat different: 9.5% of the market. However, an important nuance is highlighted here – AMD accounts for 11.6% of all industry revenues, which means that the manufacturer is mainly represented in the most profitable ...

The jump in inflation is here. Where to next?In general, it is potentially possible to look at American companies that have some competencies in terms of creating high-tech industries in the United States. Now one of the global trends is connected with the fact that the world is becoming a little less globalized. Part of the infrastructure plan is to move high-tech production – the same semiconductors-to the United States in order to reduce dependence on imported supplies.Therefore, in theory, companies like Intel can win. This is one of the few American companies that has the necessary competencies to implement such things. Moreover, Intel now has a potential deal with GlobalFoundries, one of the major American companies that can also produce semiconductors.At the same time, Intel has its own technical problems, and I will not buy its shares until they are resolved. But this is one of the companies that can theoretically benefit from such a story. This is one of the areas and one of the theses that will be played out for a long time. I don't think there are any ideas on the market right now that will instantly shoot out, because the infrastructure plan is designed for many years. But for those who invest for a long time, you can look at companies that can help implement its elements.Now let's talk about electric cars. In my opinion, companies that produce electric cars directly – Tesla, Lucid Motors and the like-are very expensive, so I don't buy anything in this sector. American traditional manufacturers, for example, GM or Ford, can potentially look more interesting.Here, in fact, there will be a bet on whether the company will be able to transform the business quickly enough to redistribute production from traditional cars with internal combustion engines to cars with batteries without large losses in terms of money and efficiency.In my opinion, GM looks interesting in this regard, especially considering that, in addition to developments in the field of electric vehicles, it has Cruise Automation. This company is one of the leaders in the market of self-driving potential cars. She's already testing them in San Francisco and elsewhere. Therefore, from such companies, in my opinion, GM is potentially interesting.But I do not keep shares of this company in my portfolio because, in addition to the future business, it still needs to understand very well what is happening at the current production facilities. For example, a company has a large number of obligations and other things that are related to its historical business and that can interfere with an effective transformation.But if we talk about the sector as a whole, I would rather look at GM than, for example, at Tesla, and even more so there are recent companies like SPAC, simply because they are very expensive. Although, for example, I really like the Tesla business, but not at the current price.Read more: Causes of inflation and scientific approaches to their ...