Should You Buy, Sell or Hold INTC Stock Before Q3 Earnings?

Core Insights - Intel Corporation (INTC) is set to report its third-quarter 2024 earnings on October 23, with sales estimated at $13.11 billion and earnings per share (EPS) expected to break even [1][5] - Earnings estimates for 2025 have remained steady at 12 cents per share, while estimates for 2026 have decreased from 67 cents to 65 cents per share over the past 60 days [1][2] Earnings Estimate Trend - The consensus estimate for Q3 earnings has not changed over the past 60 days, remaining at break-even [2] - The earnings surprise history shows a negative average surprise of 331.3% over the last four quarters, with the most recent quarter reflecting a negative surprise of 1,100% [2][3] Factors Influencing Upcoming Results - Intel's partnership with Exostellar aims to enhance its AI infrastructure offerings, potentially increasing competitiveness in the AI hardware ecosystem [6] - The launch of the AI Boost NPU and Intel Core Ultra 200V Series Processor is expected to generate additional revenue, particularly with the introduction of the F120 tablet designed for complex environments [7] - However, Intel faces challenges from increased competition, particularly from NVIDIA, and higher production costs due to a shift to a high-volume facility in Ireland [8] Market and Competitive Landscape - China's push to replace U.S.-made chips could significantly impact Intel's revenue, as the company derives a substantial portion of its income from the Chinese market [9] - The competitive landscape is tightening with rising competition from domestic firms like AMD and NVIDIA, which may adversely affect Intel's margins and growth [9] Price Performance - Over the past year, Intel's stock has increased by 61.5%, outperforming the industry average growth of 28.6% and competitors NVIDIA and AMD [10] Valuation Metrics - Intel's current price/sales ratio stands at 3.02, which is lower than the industry average of 14.54 but higher than its historical mean of 2.45 [12] Investment Considerations - Intel's innovative AI solutions are expected to benefit the semiconductor ecosystem, supported by significant investments from NVIDIA ($5 billion), Softbank ($2 billion), and the U.S. government ($8.9 billion) [13] - The company is undergoing a cultural shift to improve efficiency and adapt to a changing market landscape [14][17] Strategic Direction - Intel's strategy focuses on creating open, scalable AI systems that encompass hardware, software, and frameworks, aiming to foster a collaborative ecosystem [18] - Despite recent product launches, there are concerns that they may be insufficient to address competitive pressures and market challenges [19]