Intel results boost chip stocks on optimism PC market slump is ending

economictimes.indiatimes.com:

shares rose over 4% on Friday, a day after the chipmaker's unexpectedly strong quarterly report heralded a turnaround in fortunes after a long, margin-sapping struggle due to plummeting PC sales and a highly competitive data center market. The company's surprise second-quarter profit and its strong earnings and margin forecasts suggested the personal computer market slump was nearing an end, sparking the surge in its stock and the wider chip sector. Intel is poised to add about $6 billion to its market value, based on its current price of $36.

That is already higher than Wall Street's median target of $35 after at least 21 brokerages raised their price targets on the stock, according to Refinitiv. «Intel's turnaround is finally happening,» said Glenn O'Donnell, research director at Forrester. He also expects «far better quarters ahead for Intel and most other chipmakers».

Intel's results lifted both Advanced Micro Devices and Nvidia by nearly 2.0%, while Qualcomm rose 2.2%. A titan of the American chip industry, Intel has fallen behind rivals such as Taiwan's TSMC and Nvidia both in terms of margins and market value as the PC market downturn and stiff competition in the data center market battered its business. While Intel's shares have rallied 30% this year after a tough 2022, that has paled in comparison to the more than three-fold rise in Nvidia, which became the first chipmaker with a trillion-dollar market value in May after its «historic» forecast.