Intel (INTC) is expected to post Q2 revenues and margins that surpass expectations, but the resulting market sentiment shift is still uncertain, Wedbush Securities said in a Monday note.
The company is scheduled to report its Q2 financial results after market close on Thursday.
Intel's guidance and market consensus point to roughly 5% quarter-over-quarter revenue growth, which Wedbush analysts project will come from a boost in data center sales. With average selling prices jumping in the double digits in the quarter, pricing alone may result in the expected growth, which taken with an incremental lift in production, point to a revenue beat in the server segment, according to the note.
PC CPU average selling prices have been rising at a similar rate to server CPUs, and the analysts forecast a modest uptick in revenue for the segment from the last quarter. This pricing trend is also expected to continue into Q3, the note said.
However, the analysts said a Q2 beat may not necessarily boost the company's stock price due to external factors such as China's gains in AI, economic concerns such as the US-Iran conflict, and data center spending. With Intel's valuation well above historical norms and industry peers, the company could also be more susceptible to broader market swings, the analysts added.
Wedbush maintained the company's stock rating at neutral and price target at $60.
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