Intel Earnings look-ahead: Investors to scrutinize margin improvement, new AI chip details
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When Intel Corp (NASDAQ:INTC) reports its second-quarter results on Thursday, investors will increasingly focus on the chipmakerâs performance in terms of margin improvement and details on its bigger push into the artificial intelligence (AI) chip market.
Wall Street analysts expect Intel to post loss per share of $0.03, while revenue is expected to be $12.14 billion, representing a fall of nearly 21%.
Intel took bruising in the last few quarters majorly due to weak demand from PC makers grappling with an industry-wide slowdown. The companyâs Client Computing Group, which supplies PC makers, showed a 38% fall in revenue during its first quarter.
Global PC shipments in Q2 dropped 13.4% Y/Y, marking the sixth consecutive quarter of contraction amid macroeconomic headwinds, weak demand, and a shift in IT budget spending, according to a report by the International Data Corporation, although the market performed better than forecast for the quarter.
Intelâs comment on how the PC market would see "modest recovery" in the second half of the year also provided some respite.
However, the companyâs slumping gross margin, driven mainly by PC market slowdown and increased competition, is still a red flag for investors, even as CEO Pat Gelsinger projected that adjusted gross margins will go above 40% in the second half of the year.
With big tech companies betting on the AI boom, the Santa Clara, California-based chip giant is showing a shift in strategy by developing chips for AI and collaborating with companies to sell generative AI to enterprise clients to compete better with Nvidia (NVDA) and Advanced Micro Devices (AMD).
âThey have made significant investment and commitment to the emerging AI market, in times when they have exited other profitable businesses,â said Seeking Alpha analyst nstollon.
Last week, chipmaker Taiwan Semiconductor Manufacturing Company (TSM) reported a fall in second-quarter revenue impacted by global economic conditions and offered a weak outlook.
Over the last 2 years, Intel has beaten estimates 75% of the time and has beaten revenue estimates 50% of the time. The stock rose nearly 28% so far this year.
Seeking Alpha analysts, Wall Street as well as Seeking Alphaâs Quant Ratings consider the stock a âholdâ. The valuation has been mostly dragged by growth metrics for the stock.

Over the last 3 months, EPS estimates have been revised upward 10 times, compared to 19 downward revisions, while revenue estimates have seen 23 upward revisions versus four downward moves.