Intel Corporation INTC is gearing up to unveil its second-quarter 2024 results on Aug 1, post-market closure. The period is likely to witness a surge in revenues year over year from the Client Computing Group, propelled by an unwavering commitment to cutting-edge product development. Noteworthy enhancements in semiconductor manufacturing efficiency and supply chain management serve as additional tailwinds.
The Dynamics in Play
CCG, Intel’s foremost division, constitutes the major revenue stream encompassing computer CPUs, diverse server boards, form factor systems, and graphic products.
During the quarter, Intel made headlines by surpassing the milestone of 500 AI models optimized for the Intel Core Ultra processors. These models span a broad spectrum of AI applications including mammoth language models, diffusion, super resolution, object detection, and computer vision. This diversified AI arsenal can be deployed across various processing units within the Ultra Core processors, comprising CPU, GPU, and NPU (Neural Processing Unit). Such strides have notably solidified Intel’s stance in the burgeoning domain of AI PCs.
Intel is steadily marching towards its envisaged target of delivering over 40 million AI PC processors in 2024. The company is broadening its AI footprint to edge devices and PCs leveraging its Core Ultra processors, with endorsements from an excess of 100 software vendors.
In the quarter under scrutiny, Intel took the wraps off the Lunar Lake architecture at Computex 2024. The Lunar Lake processors are poised to ramp up the capabilities of Neural Processing Units substantially, consequently yielding significant performance enhancements in AI PCs. Equipped with cutting-edge graphics and AI processing prowess, the solution pledges advancements in security, battery longevity, and energy efficiency of devices. These innovations are anticipated to have uplifted revenues from this division.
Overall Outlook
The Zacks Consensus Estimate for CCG segment revenues stands at $7.51 billion, marking an upsurge from $6.78 billion in the corresponding period of the previous year. Our revenue estimate for this segment hovers around $7.43 billion, signaling a robust 9.7% expansion year on year.
For the June quarter, the Zacks Consensus Estimate for total revenues is tabbed at $12.92 billion, pointing towards a slight dip from the prior-year quarter’s reported figure of $12.95 billion. The consensus gauge for adjusted earnings per share rests at 10 cents, indicating a slight downtick from the 13 cents recorded in the equivalent quarter of the preceding year.
Insights into Earnings
Our tried-and-tested model refrains from definitively projecting an earnings outperformance for Intel in the second quarter. The presence of a beneficial Earnings ESP alongside a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) generally augments the likelihood of an earnings beat. Unfortunately, this isn’t the case here.
Earnings ESP: The Earnings ESP, signifying the variance between the Most Accurate Estimate and the Zacks Consensus Estimate, stands at +10.79%. The Most Accurate Estimate is tallied at 11 cents, while the Zacks Consensus Estimate sits at 10 cents.
Intel Corporation Price and EPS Surprise
Intel Corporation price-eps-surprise | Intel Corporation Quote
Zacks Rank: Intel is currently bestowed with a Zacks Rank #4 (Sell).
Promising Stock Picks
Consider the following candidates as our model reflects a favorable confluence of factors for a prospective earnings beat this quarter:
Fortinet FTNT is slated to disclose its quarterly results on Aug 6, sporting an Earnings ESP of +3.41% paired with a Zacks Rank #3.
The Earnings ESP for BWX Technologies BWXT stands at +0.88%, complemented by a Zacks Rank of 3 with financials scheduled for release on Aug 5.
Similarly, Watts Water Technologies WTS boasts an Earnings ESP of +1.17% and a Zacks Rank of 3, set to unveil its financial performance on Aug 7.