To The Moon

1. Can Intel justify further upside with earnings execution?

Yes — but only if results materially beat and guidance is constructive.

The market appears to be pricing in a scenario where:

CPU revenue comp outperforms consensus

Gross margins expand meaningfully

Free cash flow improves

And capital allocation is disciplined

If Intel delivers just in line with consensus, the stock — already up sharply — could struggle to extend gains. At this elevated valuation relative to history, the bar for positive surprise is higher.

What the market wants to see:

Better client and data-centre CPU demand than feared

ASP stability or mild growth

Inventory digestion nearing an end

Clear signs that spending discipline and execution are real

If earnings arrive with visible beat and raise characteristics, there is room for upside continuation. If results are merely solid or mixed, risk of consolidation is significant.

2. Is CPU strength sufficient on its own?

CPU demand momentum helps, but it is not sufficient for a sustainable, multi-quarter expansion.

Intel’s CPU business — both client and data centre — remains large and strategically important. Stronger CPU cycles can support:

Near-term revenue growth

Better utilisation of existing fabs

Improving gross margins

However, investors are increasingly looking at Intel not just as a CPU company but as a broader competitor in semiconductors, including foundry and advanced logic. Foundry progress matters because:

Foundry progress would:

Diversify revenue beyond Intel’s own products

Validate the IDM 2.0 strategy (partner/third-party manufacturing)

Support a higher multiple akin to peers with foundry stakes (TSMC, Samsung)

Without visible foundry traction, the narrative risks reverting to a more binary cycle play reliant on x86 strength alone. That may cap the rerating potential relative to diversified peers.

3. Positioning heading into earnings: add on strength or wait for pullback?

Here are the trading frameworks:

A. Add on weakness (preferred for disciplined risk):

If the stock is extended into earnings without meaningful volatility on good news

If guidance is cautious, expect profit-taking

Use weakness to establish or scale into positions at better basis

This is prudent given:

Elevated valuation after a strong up-move

Crowded long positioning that can amplify selloffs on neutral prints

B. Add on strength (conditional):

Only if earnings show strong beats across revenue, EPS, and guidance

Only if commentary on end-demand and inventory trends is unequivocally positive

Ideally with a pickup in buybacks or structural margin improvement

Adding on strength without clear fundamentals risks buying late in the move.

C. Wait for post-results volatility:

This is often the most prudent approach for stocks with big pre-earnings run

Earnings reactions can be sharp and irrational in both directions

Waiting for clarity on guidance reduces directional risk

4. Practical risk management and key catalysts

Data points to watch in earnings and commentary:

Client and data-centre CPU shipment trends

ASP trends and inventory digestion status

Margin trajectory for both CPUs and foundry services

Capital expenditure guidance

Commentary on foundry wins and timelines

Risk management framework:

If you are long pre-earnings: consider hedging or trimming into strength

Set clear levels where you would add on weakness (for example, significant open gaps, support zones)

Evaluate reaction to forward guidance more heavily than the current quarter’s beat

5. Summary view

CPU strength matters, but it is necessary rather than sufficient. A sustained rally needs broader confidence in strategy execution and structural initiatives such as foundry progress.

Fundamental beats could extend the rally, but the valuation after a steep run requires impressive execution.

A post-results entry on volatility is more disciplined than adding into strength without confirmation of durable trends.