We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Soft Data Center Revenues Dent Intel (INTC) Q4 Earnings?
Read MoreHide Full Article
Intel Corporation (INTC - Free Report) is scheduled to report fourth-quarter 2023 results on Jan 25, after the closing bell. In the to-be-reported quarter, the company is likely to have recorded lower revenues from the Datacenter and AI Group (DCAI) segment, owing to the challenging macroeconomic environment. However, the introduction of the state-of-the-art 5th Gen Intel Xeon processor and exciting advancements in AI-accelerated high-performance computing will likely act as a tailwind.
Factors at Play
The DCAI segment seeks to develop leading data center products, including Intel Xeon servers and field programmable gate array products, while overseeing the overall artificial intelligence (AI) strategy.
During the fourth quarter, Intel demonstrated solid advancements in AI-accelerated high-performance computing (HPC). The company leveraged Intel Xeon Processors, Intel Gaudi 2 AI accelerators and Data Center GPU Max series to showcase its capability in supporting HPC and AI workloads.
Intel is also working with Argonne National Laboratory on the Aurora generative AI project. The Aurora supercomputer, powered by the unique architecture of Intel’s Max Series GPU, can operate more than 1 trillion parameters from various subjects and craft foundational AI models. These models can be utilized to accelerate vital research in a wide range of scientific domains, including material sciences, cosmology, climate science, cancer research and more. These are likely to have supported the top line in the DCAI segment.
Intel collaborated with Verizon to showcase the capabilities of Intel's 4th Gen Intel Xeon Scalable processors and Intel's vRAN solution. This deployment resulted in a substantial increase in throughput, improved workload management, and enhanced power efficiency.
In the quarter under review, Intel launched the 5th Gen Intel Xeon processor family that delivers a 21% average performance gain for general compute, along with 36% higher average performance per watt across a range of customer workloads. With built-in AI acceleration, optimized software and enhanced telemetry capabilities, the 5th Gen Xeon mainstream data center processor enables more manageable and efficient deployments of demanding network and edge workloads across diverse use cases. Databricks also opted to utilize Intel’s performance optimization application Granulate to enhance its Data Intelligence Platform. This will likely be reflected in the upcoming results.
However, uncertain business conditions and soft demand trends induced by macroeconomic challenges and rising geopolitical volatility may hurt the top line from this segment.
Key Developments in Q4
During the quarter, Intel announced its plans to separate its Programmable Solutions Group (“PSG”) operations into a standalone business. The decision is aimed to provide PSG full autonomy and flexibility to script its own growth trajectory within the FPGA industry that serves as a harbinger of technological innovations across diverse sectors.
With PSG scheduled to commence its standalone operations from the onset of 2024, Intel will report its results as a separate business unit beginning first-quarter 2024. Despite charting newer frontiers, the two companies are likely to remain strategically aligned and will work in unison to address key areas of the FPGA industry, which is expected to witness a CAGR of more than 9% from $8 billion in revenues in 2023 to $11.5 billion by 2027. In addition to unlocking more value through financial autonomy, the standalone business is widely expected to help the parent company regain its leading position in the semiconductor ecosystem through its unique relationship with Intel Foundry Services.
Overall Expectations
The Zacks Consensus Estimate for Data Center and AI revenues is pegged at $4,104.33 million, indicating a decline from $4,304 million in the year-ago quarter. However, our estimate for revenues from this segment is pegged at $4,517.3 million, suggesting a growth year over year.
For the December quarter, the Zacks Consensus Estimate for total revenues is pegged at $15,140 million, which indicates an increase from the year-ago quarter’s reported figure of $14,042 million. The consensus estimate for adjusted earnings per share stands at 44 cents suggesting strong growth from 10 cents reported in the prior year.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Intel this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -0.32%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Intel currently has a Zacks Rank #3 (Hold).
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
The Earnings ESP for NVIDIA Corporation (NVDA - Free Report) is +3.68% and it sports a Zacks Rank of 1. The company is scheduled to report quarterly numbers on Feb 28.
The Earnings ESP for Meta Platforms, Inc. (META - Free Report) is +1.46% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Feb 1.
Image: Bigstock
Will Soft Data Center Revenues Dent Intel (INTC) Q4 Earnings?
Intel Corporation (INTC - Free Report) is scheduled to report fourth-quarter 2023 results on Jan 25, after the closing bell. In the to-be-reported quarter, the company is likely to have recorded lower revenues from the Datacenter and AI Group (DCAI) segment, owing to the challenging macroeconomic environment. However, the introduction of the state-of-the-art 5th Gen Intel Xeon processor and exciting advancements in AI-accelerated high-performance computing will likely act as a tailwind.
Factors at Play
The DCAI segment seeks to develop leading data center products, including Intel Xeon servers and field programmable gate array products, while overseeing the overall artificial intelligence (AI) strategy.
During the fourth quarter, Intel demonstrated solid advancements in AI-accelerated high-performance computing (HPC). The company leveraged Intel Xeon Processors, Intel Gaudi 2 AI accelerators and Data Center GPU Max series to showcase its capability in supporting HPC and AI workloads.
Intel is also working with Argonne National Laboratory on the Aurora generative AI project. The Aurora supercomputer, powered by the unique architecture of Intel’s Max Series GPU, can operate more than 1 trillion parameters from various subjects and craft foundational AI models. These models can be utilized to accelerate vital research in a wide range of scientific domains, including material sciences, cosmology, climate science, cancer research and more. These are likely to have supported the top line in the DCAI segment.
Intel collaborated with Verizon to showcase the capabilities of Intel's 4th Gen Intel Xeon Scalable processors and Intel's vRAN solution. This deployment resulted in a substantial increase in throughput, improved workload management, and enhanced power efficiency.
In the quarter under review, Intel launched the 5th Gen Intel Xeon processor family that delivers a 21% average performance gain for general compute, along with 36% higher average performance per watt across a range of customer workloads. With built-in AI acceleration, optimized software and enhanced telemetry capabilities, the 5th Gen Xeon mainstream data center processor enables more manageable and efficient deployments of demanding network and edge workloads across diverse use cases. Databricks also opted to utilize Intel’s performance optimization application Granulate to enhance its Data Intelligence Platform. This will likely be reflected in the upcoming results.
However, uncertain business conditions and soft demand trends induced by macroeconomic challenges and rising geopolitical volatility may hurt the top line from this segment.
Key Developments in Q4
During the quarter, Intel announced its plans to separate its Programmable Solutions Group (“PSG”) operations into a standalone business. The decision is aimed to provide PSG full autonomy and flexibility to script its own growth trajectory within the FPGA industry that serves as a harbinger of technological innovations across diverse sectors.
With PSG scheduled to commence its standalone operations from the onset of 2024, Intel will report its results as a separate business unit beginning first-quarter 2024. Despite charting newer frontiers, the two companies are likely to remain strategically aligned and will work in unison to address key areas of the FPGA industry, which is expected to witness a CAGR of more than 9% from $8 billion in revenues in 2023 to $11.5 billion by 2027. In addition to unlocking more value through financial autonomy, the standalone business is widely expected to help the parent company regain its leading position in the semiconductor ecosystem through its unique relationship with Intel Foundry Services.
Overall Expectations
The Zacks Consensus Estimate for Data Center and AI revenues is pegged at $4,104.33 million, indicating a decline from $4,304 million in the year-ago quarter. However, our estimate for revenues from this segment is pegged at $4,517.3 million, suggesting a growth year over year.
For the December quarter, the Zacks Consensus Estimate for total revenues is pegged at $15,140 million, which indicates an increase from the year-ago quarter’s reported figure of $14,042 million. The consensus estimate for adjusted earnings per share stands at 44 cents suggesting strong growth from 10 cents reported in the prior year.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Intel this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -0.32%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Intel Corporation Price and EPS Surprise
Intel Corporation price-eps-surprise | Intel Corporation Quote
Zacks Rank: Intel currently has a Zacks Rank #3 (Hold).
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
InterDigital, Inc. (IDCC - Free Report) is set to release quarterly numbers on Feb 15. It has an Earnings ESP of +1.93% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for NVIDIA Corporation (NVDA - Free Report) is +3.68% and it sports a Zacks Rank of 1. The company is scheduled to report quarterly numbers on Feb 28.
The Earnings ESP for Meta Platforms, Inc. (META - Free Report) is +1.46% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Feb 1.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.