Microsoft, Tesla, Twitter, Logitech, Snap and lots of other big companies reported this week with two of the last reporting be Intel and American express. Intel will release its financial report for Q2 2020 tonight after the US close. Intel shares, found ground so far in July above $56-$57 area, with a retracement more than 60% of the losses seen at the first quarter of 2020. However things don’t look promising or the semiconductor pioneer company.
Will the world’s market leader in e-commerce manage to reach analysts’ expectations for its fiscal quarter ending June 2020?
The key figures to be reviewed today will be the growth in operating income and more precisely on sales and on the growth of data-centre business, as the 257 billion company transitioned successfully expected to continue benefiting from the pandemic due to the spike in demand demand for laptops and cloud-computing power to support remote working, despite the supply shortage. Competition is another fundamental concern for the future of Intel as it look to left behind on innovation after the AMD’s CPU technology and Nvidia’s prolific advances to GPUs, as reported by Zacks analysts, Daniel Laboe. Hence investors will take a closer look on Intel’s enterprises and whether its data-centric investments exceeded thh PCs and microprocessors sector and in general which sector in Intel’s portfolio of storage, networking and compute products, including visual processing units that support computer vision and artificial intelligence (AI) workloads has stood out.
Intel’s consensus recommendation is “neutral to buy”, corresponding to the majority of the consensus recommendation from Zacks. Reuters’ recommendations, on the other hand, is “on hold” with 23 out of 44 analyst. According to both Zacks Investment Research and Reuters, the “chip” giant is expected to have $1.11 earnings per share on sales of $18.54 billion in for the second quarter of 2020. The reported EPS for the same quarter last year was $1.06. This represents an incline over the year of 4.87% and an 23% decline since the reported EPS for the fiscal quarter ending March 2020.
Intels shares are nearly $1 higher this week, as market participants are looking ahead of the earnings report tonight. Markets remain cautious, waiting to see whether the global trade tensions will keep having an impact on the company’s growth and forecasts and whether company’s management team manage to overcome the innovation and supply shortage issues.
Turning to the technical side, if the company achieves accuracy with its forecast, then a positive earnings outcome without any negative surprises could attract more bulls back into the market. This could boost price action higher and hence be a small recovery of the drop so far in June and a retest of $65-66 area again. The long term outlook however remains positive, as the asset sustains an upwards move supported from 50-DMA since April, with momentum indicators in both weekly and monthly time-frame consolidating positively.
