To The Moon

And just like that, the beleaguered $Intel(INTC)$ is back in vogue; after releasing its Q2 2023 earnings on Thu, 27 Jul 2023.

At first glance, it looked “impressive”.

• Revenue: came in at $12.9 Billion; that is -15% YoY. This is Intel’s 6th consecutive quarter of sales decline. However, it was “better” than Refinitiv’s consensus estimate of $12.13 Billion.

• Gross margin: was 39.8%; that is -0.7%, YoY.

• Operating income: was $6.2 Billion.

• Net income: was $1.5 Billion; a “plus” after 2 consecutive quarters of losses.

• Earnings per share (EPS): was $0.35.

• Non-GAAP EPS: was $0.13; topping Refinitiv’s estimate of -$0.03.

What Intel Did To Turn “Profitable”?

• Intel’s better than expected results are mostly owed to its effective cost-cutting efforts that resulted in savings amounting to $3 Billion.

• By laying off staff and slashing dividend, among other measures, Intel plans to save $10 Billion per year by mid-decade.

On a call with analysts, Intel CEO Pat Gelsinger said & shared the followings:

• Company still sees “persistent” weakness in all segments of its business through year-end

• Server chip sales would not recover until Q4 2023.

• Cloud companies were focusing more on securing graphics processors for artificial intelligence instead of Intel’s central processors.

Intel’s Q3 2023 Earnings Forecast:

While Q2 results are hardly a week’s old, market and analysts are already looking forward to Intel’s next quarter earnings:

• Earnings per share (non GAAP) is expected to be $0.20.

• Midpoint sales of $13.4 Billion.

• Both (above) topping analyst expectations of $0.16 cents per share on $13.23 Billion in sales.

New Businesses In The Making:

5 new business ventures in Intel’s diverse divisions; that will add “ka-ching” to its coffer:

(1) Process & Manufacturing:

• On track to meet its goal of (a) achieving five nodes in four years and (b) to regain transistor performance & power performance leadership by 2025.

• Achieved an industry-first implementation of backside power using Intel PowerVia in a test chip, resulting in notable performance and efficiency gains.

• PowerVia will be incorporated into Intel 20A, expected to launch in the first half of 2024.

(2) Intel Foundary Services (IFS):

• US Department of Defense’s RAMP-C program, led by Intel sees 2 new strategic defense industrial base customers, namely Boeing & Northrop Grumman.

• The program seeks to assure domestic access to next-generation semiconductors by establishing and demonstrating a US-based foundry ecosystem to develop and fabricate chips on Intel 18A.

(3) Intel Data Centre & AI Group (DCAI):

• Google Cloud announced the general availability of cloud instances of 4th Gen Intel Xeon Scalable processors.

• ASUS agreed to term sheet to manufacture, sell and support 10th to 13th Gen NUC systems product line and develop future innovative NUC systems product designs following Intel exit.

• Boston Consulting Group and Intel will collaborate to deliver enterprise-grade, secure generative AI leveraging Intel’s Gaudi® and 4th Gen Xeon® offerings.

• Dell Technologies, in collaboration with UK Atomic Energy Authority (UKAEA) and the Cambridge Open Zettascale Lab, design prototype fusion power plant with Intel.

• Ericsson will utilize 18A for future custom 5G SoC. It will also collaborate with Intel to accelerate industry scale open RAN utilizing Xeon-based platforms.

• SAP & Intel announced collaboration to deliver powerful & secure instances for SAP, powered by 4th Gen Intel Xeon Scalable processors (see below).

(4) Client Computing Group (CCG):

• Strong demand remains for Intel’s 13th Gen Intel Core processor family.

• With > 300 designs expected from OEM partners in 2023 alone.

• In addition, Intel introduced the Intel Arc Pro A60 and Pro A60M as new members of the Intel Arc Pro A-series professional range of graphics processing units (GPUs).

• The Intel-Microsoft collaboration to drive AI-development on personal computing, and previewed AI-enabled capabilities of Intel’s upcoming Meteor Lake client PC processors at Microsoft’s Build 2023 conference. (see below).

(5) MobileEye:

• Continues to contribute profitability in Q2 2023.

• Continues to demonstrate traction with its advanced product portfolio by winning a contract with luxury car maker - Porsche.

• It is also teaming up with German Volkswagen Group to trial “mobility as a service” model way of driving.

• It bottomed out at $24.90 on Mon, 27 Feb 2023.

• It has been trending upwards in “stealth” for the past 6 months.

• With Q2 earnings out, it added +6.60% to $36.83 by the time market closed on Fri,28 Jul.

Question: Is it really a case of market's confidence in Intel's outlook & strategy or punters hard at work?

My Personal View:

• Whether Intel is able to jam its feel in the Ai-corridor and integrates into this community, is too soon to tell.

• Looking at all the initiatives & collaborations, the future does not look dim for this once-Tech giant.

• Especially like the Windows-Intel collaboration again; will this be the 2nd coming of Wintel? LOL!

• What I have learnt is not to discount veteran companies in any industry; they might just have a surprise up their sleeves.

• Do you think there is light at the end of the tunnel for Intel Inc?

• Do you think Intel will be able to carve out a path for itself in the AI-sphere?

Please give a “LIKe”, “Share” & “Re-post” ok. Thanks. Rating is very important (to me).

Would you consider “Follow me” and get firsthand read of my daily new posts? Thanks!

@Daily_Discussion

@TigerPM

@TigerStars

@Tiger_SG

@TigerEvents