Intel Corporation North America Intel outlook tripped up by supply constraints

Intel Corporation Conference Call Summary Company Overview - Company: Intel Corporation (Ticker: INTC.O) - Industry: Semiconductors - Market Cap: $263.778 billion - Price Target: Increased from $38.00 to $41.00 Key Points Financial Performance - 4Q Financials: Non-GAAP revenue of $13.874 billion, exceeding estimates of $13.438 billion and $13.321 billion [doc id='13'][doc id='36'] - Segment Performance: - Client Computing (CCG) revenue: $8.193 billion (down 7% year-over-year) - Data Center & AI (DCAI) revenue: $4.737 billion (up 9% year-over-year) - Intel Foundry Services (IFS) revenue: $4.507 billion (up 4% year-over-year) [doc id='13'] - Gross Margin: 37.9%, down 206 basis points quarter-over-quarter and 418 basis points year-over-year, but above estimates [doc id='13'] - EPS: Reported at $0.15, above the Street estimate of $0.08 and Morgan Stanley's estimate of $0.06 [doc id='13'] Guidance and Future Outlook - Next Quarter Guidance: Revenue expected at $12.2 billion (down 10.8% quarter-over-quarter and 3.7% year-over-year), below Street estimates [doc id='14'] - Gross Margin Guidance: Projected at 34.5%, below previous estimates [doc id='14'] - EPS Guidance: Expected at $0.00, below Street estimates of $0.06 [doc id='14'] - Long-term Outlook: Projected revenue for CY2026 at $53.097 billion with a gross margin of 39.0% and EPS of $0.63 [doc id='15'] Market Dynamics - Supply Constraints: Ongoing supply issues are impacting revenue growth, with no growth expected in the second half of 2025 [doc id='3'][doc id='4'] - Competitive Landscape: AMD has captured all unit growth due to Intel's supply constraints, raising concerns about further share loss [doc id='4'] - Server Market: Strong demand exists, but Intel's supply growth is lagging behind competitors [doc id='10'] Strategic Considerations - Foundry Business: Intel's foundry strategy faces challenges, including customer skepticism and competition from TSMC and Samsung [doc id='12'] - Investment in Technology: Management emphasizes the need for clarity in strategic direction and regaining performance leadership in server CPUs [doc id='22'] - Partnerships: Recent partnerships, such as with NVIDIA, are viewed positively but require execution to unlock value [doc id='16'] Risks and Concerns - Execution Risks: Uncertainty in the CPU roadmap and foundry strategy could impact stock performance [doc id='19'] - Market Sentiment: The stock's recent rally may be driven by geopolitical enthusiasm rather than fundamental improvements [doc id='17'] - Competitive Pressures: Continued competition from AMD could lead to further share losses and pressure on average selling prices (ASPs) [doc id='34'] Conclusion - Investment Rating: Currently rated as Equal-weight, with cautious sentiment due to stock appreciation and ongoing execution risks [doc id='15'][doc id='22'] - Price Target Adjustment: Price target raised to $41.00 based on revised EPS estimates and market conditions [doc id='18']