Intel Corporation INTC is set to disclose its second-quarter 2024 financial results on Aug 1, post markets closure. In the anticipated quarter, the tech giant is likely to reveal a surge in revenues year over year from its Client Computing Group (CCG), owing to a robust focus on product innovation. The company’s endeavors to enhance efficiency in semiconductor manufacturing and streamline the supply chain serve as favorable tailwinds.
Key Factors at Play
The CCG segment constitutes Intel’s largest revenue source, encompassing computer CPUs, various server boards, form factor systems, and graphic products.
In the second quarter, Intel announced the successful optimization of over 500 AI models for its core Ultra processors. These models span a spectrum of AI applications, from extensive language models to diffusion, super resolution, object detection, and computer vision. Such AI applications can be deployed across different processing units within the Ultra Core processors, including CPU, GPU, and NPU (Neural Processing Unit). This development has notably reinforced Intel’s presence in the burgeoning domain of AI PCs.
Paving the way towards its objective of shipping over 40 million AI PC processors in 2024, Intel is expanding its AI landscape to encompass edge devices and PCs with its Core Ultra processors, while collaborating with more than 100 software vendors.
In the period under review, Intel introduced the Lunar Lake architecture at Computex 2024. The Lunar Lake processors are poised to enhance the capacities of Neural Processing Units and deliver substantial performance enhancements in AI PCs. Boasting advanced graphics and AI processing capabilities, this solution promises enhancements in device security, battery life, and power efficiency. These advancements likely underpinned revenue growth within this segment.
Overall Revenue Expectations
The Zacks Consensus Estimate for CCG segment revenues is positioned at $7.51 billion, reflecting an escalation from $6.78 billion in the corresponding period last year. Our revenue estimate for this segment stands at $7.43 billion, indicating a robust year-over-year growth of 9.7%.
For the June quarter, the Zacks Consensus Estimate for total revenues hovers around $12.92 billion, slightly below the prior year’s reported figure of $12.95 billion. The consensus estimate for adjusted earnings per share settles at 10 cents, signaling a decline from the 13 cents recorded in the previous year.
Earnings Whispers
Despite a positive Earnings ESP of +10.79%, derived from the variance between the Most Accurate Estimate of 11 cents and the Zacks Consensus Estimate of 10 cents, our model does not decisively substantiate an earnings outperformance by Intel in the second quarter.
Intel Corporation Price and EPS Surprise
Intel Corporation price-eps-surprise | Intel Corporation Quote
Zacks Rank: Intel currently holds a Zacks Rank #4 (Sell).
Stocks to Consider
For investors keeping a keen eye on earnings performances, some companies worth considering, based on our model’s insights pointing to a promising earnings beat potential this season, include:
Fortinet FTNT, with its quarterly results scheduled for release on Aug 6. Boasting an Earnings ESP of +3.41% and a Zacks Rank of 3.
The Earnings ESP for BWX Technologies BWXT is +0.88%, and the company holds a Zacks Rank of 3. The firm is set to reveal its quarterly figures on Aug 5.
Furthermore, the Earnings ESP for Watts Water Technologies WTS stands at +1.17%, with a Zacks Rank of 3. The company is due to report its quarterly results on Aug 7.
