Intel faces a test of its comeback story as shares fall 32% in a month
Wedbush expects another beat on Thursday but says guidance for the fourth quarter will decide how the stock reacts.
Intel reports third-quarter results on Thursday after the US market close, with Wedbush saying the stock's reaction will depend less on the quarter than on the fourth-quarter outlook and any hints about 2027.
The shares have fallen about 32% over the past month and closed at $90.47.
Analyst Matt Bryson keeps a Neutral rating and a $98 price target, which values the shares at about 45 times forecast 2027 earnings of $2.22 per share, less net debt.
Intel guided to third-quarter sales of $15.8 billion to $16.8 billion and earnings of $0.38 a share, and consensus sits at the guide.
Wedbush models revenue of $16.3 billion and earnings of $0.38, but expects Intel to beat as it has for seven consecutive quarters of revenue above its outlook.
Bryson thinks the beat will be narrower than in the second quarter, when gross margin came in about 280 basis points ahead of the guide.
Personal computer shipments fell about 20% year on year in the quarter, according to the research firm IDC, as memory costs pushed up prices.
Memory and substrate costs, the boards that carry the chips, are still rising.
Servers are the bright spot. Wedbush forecasts data centre revenue of $6.7 billion, up 7% on the previous quarter, and $7.7 billion in the fourth quarter.
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For the fourth quarter, it models revenue of $17.5 billion and earnings of $0.49, against consensus of $16.9 billion and $0.43.
The gap is mainly down to margins, with Wedbush forecasting a gross margin of 44%.
Investors will also watch capital spending, which Intel has said will exceed $20 billion this year, and any outline for 2027.
Intel raised $23 billion in August by selling about 242 million shares at $95, which Wedbush says will lift the share count by about 2% in the third quarter and 5% in the fourth.
Bryson says he is still waiting for clearer proof that Intel has fixed its manufacturing and design problems, with margins trailing peers despite running at full capacity.
