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Intel Q4 Earnings Preview: Analysts Upgrade Stock Ahead of Results
5 months agoUS
Intel (INTC) is set to report its fourth-quarter 2025 earnings after market close on January 22. Analysts from HSBC and Seaport Research have upgraded the stock ahead of the report. Investors are keen to see if sales are stabilizing after a slowdown, updates on the foundry business, and guidance for margins into 2026. The market is also watching to see if Intel can capitalize on the rising interest in AI and chip stocks, following strong results from Taiwan Semiconductor Manufacturing (TSM).
Key Insights
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Analyst Upgrades:: HSBC and Seaport Research upgraded Intel ahead of earnings, citing projected server CPU demand from agentic AI, improved foundry customer engagement, and strong PC signals.
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Server CPU Demand:: Agentic AI is expected to significantly increase server CPU demand, forecasting year-over-year server shipment growth above consensus estimates. *Why this matters: This could drive significant revenue growth for Intel.*
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Foundry Business:: Improved outlook due to increased external customer engagement. While Nvidia is likely to remain with TSMC for datacenter GPUs, Apple may be negotiating with Intel for processor production. *Why this matters: Securing Apple as a customer would be a major win for Intel's foundry business.*
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Earnings Estimates:: The Zacks Consensus Estimate for sales is $13.37 billion and EPS is 8 cents. Earnings estimates for 2025 have increased from 32 cents to 34 cents per share, but declined from 59 cents to 58 cents per share for 2026.
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Earnings Surprise History:: Intel has a strong earnings surprise history, beating estimates thrice in the last four quarters, with an average surprise of 577.1%.
In-Depth Analysis
Intel is focusing on several key areas to drive growth. These include new AI chips and the foundry business, but the company faces margin pressures and risks from China. Intel previewed the Intel Core Ultra series 3 processor (code-named Panther Lake) and Xeon 6+ (code-named Clearwater Forest). These products are built on Intel 18A, the most advanced semiconductor process in the United States.
During the quarter, there was speculation about Intel developing Apple’s M series chips for MacBooks and iPads by early 2027. Although unconfirmed, this has generated renewed interest in Intel Foundry. Intel is also emphasizing the execution of operational goals to establish itself as a leading foundry.
However, Intel faces challenges, including competition from NVIDIA and potential impacts from China's move to replace U.S.-made chips with domestic alternatives by 2027. The company has received $7.86 billion in direct funding from the U.S. Department of Commerce for its commercial semiconductor manufacturing projects under the U.S. CHIPS and Science Act.
FAQs
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Q: What is driving analyst upgrades for Intel stock ahead of earnings?
Analysts cite projected server CPU demand from agentic AI, improved foundry customer engagement, and strong PC signals.
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Q: How is agentic AI expected to impact Intel’s server CPU business?
Analysts believe agentic AI will significantly increase server CPU demand, forecasting year-over-year server shipment growth above consensus estimates.
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Q: What is the outlook for Intel’s foundry business based on recent analyst commentary?
Outlook has improved due to increased external customer engagement, though Nvidia is likely to remain with TSMC for datacenter GPUs, and Apple may be negotiating with Intel for processor production.
Key Takeaways
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Intel is expected to report its Q4 earnings on January 22, with analysts anticipating potential volatility.
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Key growth drivers include server CPU demand from AI, improved foundry engagement, and PC market signals.
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Challenges include margin pressures, competition from NVIDIA and AMD, and potential impacts from China's technology self-sufficiency efforts.
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Intel is trading relatively cheaply compared to the industry, but investors should trade with caution due to the uncertain business environment.
Discussion
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