Intel Earnings Preview: Big Bet on New Factories, AI Chip Enough to Sustain Rally?
Despite facing tough competition from Advanced Micro Devices (NASDAQ:AMD) and Nvidia (NASDAQ:NVDA), Intel's (NASDAQ:INTC) stock has gained over 60% in the past 12 months.
While the Santa Clara, California-based company has faced declines in the PC sales segment, its latest artificial intelligence chips, such as the Gaudi3, which is used in generative AI, appear to be putting Intel back on the right track to sustained growth.
This positive streak, however, will be put to the test tomorrow after market close as the company reports earnings for Q4 2023.
If numbers come out in line with expectations, it should affirm the positive trend in core revenue and earnings per share indicators. Barring negative surprises, the company's stock is poised to confidently maintain its upward trajectory.
Intel's strategy for the present and future revolves around sustaining its positive momentum in the chip market and artificial intelligence. In addition to the existing factory in Arizona, Intel is strategically investing in new locations such as Israel and Poland.
A potential contract to supply chips to the US military, although unconfirmed, could play a crucial role in ensuring stable demand in the forthcoming years.
The recently unveiled Gaudi3 chip is anticipated to deliver substantial performance improvements in network performance and throughput compared to its predecessor, contributing to revenue and profit growth in the upcoming quarters.
Noteworthy is Intel's increased involvement in chips for generative artificial intelligence in the automotive sector, a market with significant growth potential, as AI demand is projected to surge by 40% by 2027, reaching up to $16 billion in revenue.
As Intel gears up for its quarterly results
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