Computer processor maker Intel (INTC) will report its third-quarter earnings after the bell Thursday, as chip stocks continue to recover from an AI-driven rout over the last month.
Intel shares fell more than 20% over the last month, while Micron (MU) and AMD (AMD) have dropped roughly 10%. Nvidia (NVDA) is off about 3%.
The earnings report comes after memory chip maker SK Hynix (SKHY) reported strong results with revenue skyrocketing 328% to some $78.7 billion, with operating profit jumping 632%, helping to ease concerns about the AI trade.
For the quarter, Intel is expected to report earnings per share (EPS) of $0.40 on revenue of $16.5 billion, according to Bloomberg analyst consensus estimates. The company reported EPS of $0.23 and revenue of $13.6 billion in the same period last year.
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Intel’s Intel Product segment, which includes sales of its data center and PC processors, is expected to come in at $15.5 billion, with PC chip sales coming in at $8.8 billion. Data center sales are projected to be $6.6 billion.
AI is driving strong demand for Intel’s data center central processing units (CPUs), prompting the company to increase its capital expenditures as it looks to build more manufacturing facilities to meet customer demand.
At the same time, the PC industry is struggling as memory and storage price spikes force companies to raise laptop and desktop prices, lowering overall sales volume but raising average selling prices.
Intel’s Foundry business, its chip manufacturing arm, is expected to generate $6.1 billion in revenue, a potential 44% year-over-year increase.
Intel’s foundry business is reportedly beginning to sign big-name customers, with The Information reporting that Google (GOOG, GOOGL) placed an order with the company to produce 3 million of its custom Tensor Processing Units. Nvidia is also reportedly in talks with Intel to build its chips.
According to Reuters, Intel is also in discussions with SK Hynix about a deal that could see the memory chip maker lease space at Intel’s Ohio manufacturing facility.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on X at @DanielHowley.
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