News Intel Is Back to Profitability But Lowers Expectations for Q4 2024

[Admin]

Worsening economic conditions drive Intel's sales down across the board.

Intel Is Back to Profitability But Lowers Expectations for Q4 2024 : Read more

 

[watzupken]

The result looks good only because the last quarter they made a loss, and now back in the black. But the reality is that they are far from where they used to be when they mostly monopolized the CPU market. With the retail market mostly back to pre-COVID demand level, there will be little growth in this market segment. In the DC side of things, they are also facing strong competition from AMD and ARM, which from the business results over the last few quarters, have shown that Intel is struggling in this space.

 

[Deleted member 14196]

The result looks good only because the last quarter they made a loss, and now back in the black. But the reality is that they are far from where they used to be when they mostly monopolized the CPU market. With the retail market mostly back to pre-COVID demand level, there will be little growth in this market segment. In the DC side of things, they are also facing strong competition from AMD and ARM, which from the business results over the last few quarters, have shown that Intel is struggling in this space.

Nice summary

 

[rluker5]

The result looks good only because the last quarter they made a loss, and now back in the black. But the reality is that they are far from where they used to be when they mostly monopolized the CPU market. With the retail market mostly back to pre-COVID demand level, there will be little growth in this market segment. In the DC side of things, they are also facing strong competition from AMD and ARM, which from the business results over the last few quarters, have shown that Intel is struggling in this space.

I did a search for Intel's annual/quarterly numbers for the last 15 years or so and I don't know where you got this from. 2022 looks like a relatively bad year. So were 2009, 2012, 2013 and 2015. Been bad for tech in general and AMD is struggling as well. The numbers are there for anybody to search so don't trust only my statement, evaluate for yourself. The market does seem to have largely abandoned traditional financial measures in exchange for chasing growth, sometimes even just price growth not attached to anything else, but now that growth is scarce IDK what will happen with stock valuations. I wish I did.
But I've seen enough anonymous armchair experts be wrong that I don't go by what they say. Especially when they seem to be using one sided information to push a narrative.

 

[spongiemaster]

Q4 2024? Intel's fiscal years is 2 years ahead?

 

[Maikk]

And no talking about Apple's results. This site is technology or not.

 

[PiranhaTech]

I knew they took a hit, but I didn't think it was that bad

 

[JamesJones44]

I did a search for Intel's annual/quarterly numbers for the last 15 years or so and I don't know where you got this from. 2022 looks like a relatively bad year. So were 2009, 2012, 2013 and 2015. Been bad for tech in general and AMD is struggling as well. The numbers are there for anybody to search so don't trust only my statement, evaluate for yourself. The market does seem to have largely abandoned traditional financial measures in exchange for chasing growth, sometimes even just price growth not attached to anything else, but now that growth is scarce IDK what will happen with stock valuations. I wish I did.
But I've seen enough anonymous armchair experts be wrong that I don't go by what they say. Especially when they seem to be using one sided information to push a narrative.

I agree don't listen to talking heads/analysts, they are talking their book, not what is good for you. However, you can make an educated guess, Intel's growth rate has largely been flat for the last 10 years. Companies that don't grow and have a 5% dividend usually trade 12.6 times their forward earnings (or so a quick search shows). Intel has said they expect to earn around $2 a share next year, put a 12x on that and you get $24. I would put good money that if things don't change for Intel on the growth front the stock will be between $20 and $30 in a year from now. This of course assumes that their foundry business won't take off or completely flop out in the next 12 months, same with Meteor Lake. Those could move that earnings and p/e ratio, but that gets into speculation and to each their own on that.

 

[rluker5]

I agree don't listen to talking heads/analysts, they are talking their book, not what is good for you. However, you can make an educated guess, Intel's growth rate has largely been flat for the last 10 years. Companies that don't grow and have a 5% dividend usually trade 12.6 times their forward earnings (or so a quick search shows). Intel has said they expect to earn around $2 a share next year, put a 12x on that and you get $24. I would put good money that if things don't change for Intel on the growth front the stock will be between $20 and $30 in a year from now. This of course assumes that their foundry business won't take off or completely flop out in the next 12 months, same with Meteor Lake. Those could move that earnings and p/e ratio, but that gets into speculation and to each their own on that.

What would that put AMD at? $20-$30? Not arguing, just pointing out a disparity.

 

[JamesJones44]

What would that put AMD at? $20-$30? Not arguing, just pointing out a disparity.

AMD has grown, the probably deserve a growth premium (though one could argue their growth may be leveling off). If we give them the same 12x as Intel they would be $3.90 x 12 it would be $47. If we apply an 30% growth premium (that has been about their average the last few years) you come to about 16-18x earnings which is $62 to $71 next years earnings you get (16x and 18x respectively) (different houses use different formulas for growth premiums so this is a bit harder to compare overall). So I would say the window for AMD is somewhere between $55 and $80. I'm personally not sure they can keep up 30% growth, even with the Xilinx acquisition, but that gets back into speculation which is really person dependent.

 

[rluker5]

AMD has grown, the probably deserve a growth premium (though one could argue their growth may be leveling off). If we give them the same 12x as Intel they would be $3.90 x 12 it would be $47. If we apply an 30% growth premium (that has been about their average the last few years) you come to about 16-18x earnings which is $62 to $71 next years earnings you get (16x and 18x respectively) (different houses use different formulas for growth premiums so this is a bit harder to compare overall). So I would say the window for AMD is somewhere between $55 and $80. I'm personally not sure they can keep up 30% growth, even with the Xilinx acquisition, but that gets back into speculation which is really person dependent.

30% growth is rather suspect. Their earnings estimate for this quarter has dropped by 33% over the last 30 days and they are giving away 32GB DDR5 and $50 off mobos just to sell their new CPUs at Microcenter. Not to mention the post crypto hit. And AMD has no dividend. And their P/E ratio is still over 4x what Intel's is for what little that matters in today's market.

But really one has to go with the predictors that have been working and not just some of the countless other details and reasons. The goal of the markets isn't to be right, but to make money. Thanks for your reply.

 

[TerryLaze]

and they are giving away 32GB DDR5 and $50 off mobos just to sell their new CPUs at Microcenter.

From the moment the CPUs are at the retailer they are already bought, so it's not AMD doing that, happens with intel products as well.
It could cause retailers to make smaller orders in the future though if they have to do more of these deals more often.

 

[bit_user]

In the DC side of things, they are also facing strong competition from AMD and ARM, which from the business results over the last few quarters, have shown that Intel is struggling in this space.

The impact of Sapphire Rapids' continual delays should not be underestimated. This seriously affects their competitiveness, in the DC segment.