Citigroup published a research report stating that Intel (INTC.US) exceeded expectations in its last quarter performance, but due to internal supply constraints, gross margin declined, leading to first-quarter guidance below market expectations, triggering a drop in the stock price.
The firm believes that due to strong demand for general server CPU upgrades driven by AI, if Intel's supply were not constrained, its sales could have surpassed seasonal performance. Based on the decline in gross margin, the firm has lowered its earnings per share estimates for the fiscal years 2026 and 2027 by $0.48 and $0.17 respectively, and reduced the target price from $50 to $48, maintaining a &#34;Neutral&#34; rating

On October 26th, after the U.S. stock market closed, chip giant Intel released its Q3 2023 financial report. The report showed that Intel's total revenue in the third quarter fell 8% year-on-year to $14.16 billion, marking the seventh consecutive quarter of declining sales, although it was still higher than the market expectation of $13.53 billion. In the second quarter, revenue had previously dropped 15% year-on-year, and the company expects revenue to return to growth in the fourth quarter. However, the sales of the Network and Edge Group (NEX), which includes IoT and other segments, fell 32% year-on-year to $1.5 billion. More importantly, the server chip division, named "Data Center and Artificial Intelligence," has yet to recover growth, with third-quarter revenue declining 10% year-on-year to $3.8 billion. Facing multiple competitive pressures, do you think Intel can turn the tide in the AI era?

On October 26th, after the U.S. stock market closed, chip giant Intel released its Q3 2023 financial report. The report showed that Intel's total revenue in the third quarter fell 8% year-on-year to $14.16 billion, marking the seventh consecutive quarter of declining sales, although it was still higher than the market expectation of $13.53 billion. In the second quarter, revenue had previously dropped 15% year-on-year, and the company expects revenue to return to growth in the fourth quarter. However, the sales of the Network and Edge Group (NEX), which includes IoT and other segments, fell 32% year-on-year to $1.5 billion. More importantly, the server chip division, named "Data Center and Artificial Intelligence," has yet to recover growth, with third-quarter revenue declining 10% year-on-year to $3.8 billion. Facing multiple competitive pressures, do you think Intel can turn the tide in the AI era?

In the AI era, can Intel win a comeback?

INLX

SOXL

INTW

INTC

INTS

SOXX

Citi has lowered Intel's target price to $48 and maintained a "Neutral" rating. Although Intel's performance last quarter exceeded expectations, the gross margin declined due to internal supply constraints, and the guidance for the first quarter was below market expectations, leading to a drop in stock price. Citi believes that if supply is not constrained, AI-driven server CPU demand will push sales beyond seasonal performance. Based on the decline in gross margin, earnings per share estimates for fiscal years 2026 and 2027 have been lowered by $0.48 and $0.17, respectively

AASTOCKS

Intellinetics

VanEck Semiconductor ETF

Direxion Semicon Bull 3X

GraniteShares 2x Long INTC Daily ETF

Intel

Intensity Therapeutics

iShares Semiconductor ETF

SPDR S&P Semicon

Citi lowers Intel's target price to $48, maintains "Neutral" rating