Intel: Moment of Truth Rapidly Approaching

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Intel: Moment of Truth Rapidly Approaching

Seeking Alpha01-21 13:46

SummaryIntel's upcoming Q4 earnings could mark a turning point, with focus on restructuring progress and Gaudi®3 AI accelerator up-scaling.Low expectations set the stage for potential outperformance ...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nIntel: Moment of Truth Rapidly Approaching\n</h2>\n\n<h4 class=\"meta\">\n\n\n2025-01-21 13:46 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4750705-intel-moment-of-truth-rapidly-approaching><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryIntel's upcoming Q4 earnings could mark a turning point, with focus on restructuring progress and Gaudi®3 AI accelerator up-scaling.Low expectations set the stage for potential outperformance ...</p>\n\n<a href=\"https://seekingalpha.com/article/4750705-intel-moment-of-truth-rapidly-approaching\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":null,"symbol_name":null,"start_time":0,"source_url":"https://seekingalpha.com/article/4750705-intel-moment-of-truth-rapidly-approaching","article_id":"1151488597","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=1151488597","pubTimestamp":1737438382,"columns":[],"sourceInfo":{"source_id":"lsy1728464409321","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"SummaryIntel's upcoming Q4 earnings could mark a turning point, with focus on restructuring progress and Gaudi3 AI accelerator up-scaling.Low expectations set the stage for potential outperformance in","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{},"translate_title":"英特尔：关键时刻迅速临近","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"INTC":1.1},"content_text":"SummaryIntel's upcoming Q4 earnings could mark a turning point, with focus on restructuring progress and Gaudi®3 AI accelerator up-scaling.Low expectations set the stage for potential outperformance in 2025, with Intel possibly returning to profitability and achieving a stock re-rating.Intel's restructuring and impairment charges have weighed heavily, but positive news on Gaudi®3 could trigger a strong price reaction.Despite past disappointments, Intel's potential to monetize non-essential businesses and improve data center performance suggests it shouldn't be written off yet.JHVEPhoto/iStock Editorial via Getty ImagesIntel Corporation (NASDAQ:INTC) will soon present its earnings for the fourth quarter, which could define a significant turning point for the chip company.Investors will be looking forward to hearing news about Intel’s progress with regards to its restructuring program and, quite likely, to any kind of updates relating to the chip company’s up-scaling of AI accelerator Gaudi®3. The Gaudi®3 is Intel’s answer to the GPUs offered by its competitors Nvidia Corp. (NVDA) and Advanced Micro Devices Inc. (AMD) and could potentially profit from AI accelerators being in a kind of supply shortage.Nvidia is obviously leading the market here, but both Advanced Micro Devices and Intel have developed their own AI accelerators in order to meet sizzling demand from the data center market.If Intel avoids any new major impairments and restructuring charges, the chip company could indeed return to profitability in 2025 which in turn could precipitate a stock re-rating.My Rating HistoryThe latest restructuring of Intel was obviously a very defining event for the chip company, which triggered a considerable stock drop. As I pointed out in my last piece on Intel, however, the focus on the restructuring appeared to me to be a mistake as the chip company retains options to sell non-essential businesses such as Mobileye or Altera. Intel might announce a new set of strategic initiatives in order to right the ship at the chip company, including new savings measures.I think the worst is behind Intel, and I am looking forward to seeing gradual improvements in operating performance, particularly as Intel starts to up-scale Gaudi®3 deliveries.Low Expectations Set The Stage For Outperformance Potential In 2025Though expectations for Intel’s fourth quarter are not high at all, the market clearly anticipates that the worst is already behind the chip company. Intel had a ‘kitchen-sink’ third quarter in which it threw everything at investors at once: Intel’s sales declined 6% YoY, the company recognized $15.9 billion in impairment charges and escalating operating losses in Intel Foundry.In 3Q24, Intel Foundry, Mobileye and Altera all suffered sales declines, with Altera seeing a whopping 44% YoY sales decline. Altera is a non-essential business unit that supplies customers with end-to-end FPGAs. The only two segments that exhibited sales growth in the last quarter were Data Center and AI as well as Network and Edge which I also anticipate to remain solidly in positive sales growth territory in 4Q24.Due to sales declines in Intel’s Client Computing, Intel’s core processor business, the chip company overall saw a disappointing 6% sales drop. I do think that with momentum building in data centers that Intel has a good chance of returning to positive sales growth in 4Q24. The main reason is the very strong earnings presentation of Taiwan Semiconductor Manufacturing Company (TSM) which already reported very robust sales growth for the month of December.Business Unit Revenue And Trends (Intel Corporation)Moreover, after Intel cleaned house in the third quarter, earnings for 4Q24 should look substantially better, that at least is my expectation when it comes to the chip company.Intel is scheduled to makes its earnings presentation for 4Q24 on January 30, 2024 and expectations are not particularly high. The market consensus is presently anchored at $0.12 per share which does, however, reflect a turnaround from a reported loss of $0.46 per share in the prior quarter.Only a slight profit beat, paired with a slightly optimistic outlook with regards to the progress of Intel’s restructuring, could trigger a possibly strong price reaction at the end of the month.Earnings And Revenues (Yahoo Finance)Intel’s Return To ProfitabilityIntel is widely anticipated to report positive earnings in 2025 which would mark a stark contrast to 2024 figures. Intel is presently expected to earn $0.97 per share, on a full-year level, which reflects back to us a 22x profit multiple.Nvidia and Advanced Micro Devices are selling for leading (2025) profit multiples of 31x and 24x. Both chip companies, however, are not bogged down by a restructuring and both companies also grew at more than 100% YoY in their data center segments.Intel, on the other hand, only grew its sales 9% YoY, but taking into account the overall tight supply of AI accelerators, I think that Intel does have potential to grow sales faster in 2025, predominantly because of the Gaudi®3 AI accelerator. Gaudi®3 is poised to see a substantial up-scaling in 2025 which could aid a re-rating of Intel’s stock.Earnings Estimate (Yahoo Finance)Obviously, Intel’s ongoing restructuring and uncertainty about a new round of impairment charges as well as slow growth in the data center segment so far have all been reasons for the big valuation discount relative to Intel’s competitors.If you want to focus on growth and market dominance, I think Nvidia is far and away the best chip stock to own, not least because of Nvidia’s own up-scaling of its Blackwell chip.Advanced Micro Devices might be more a sentiment investment here as investors, in my view, underestimate AMD’s accelerating growth in data centers. I recently penned a piece on Advanced Micro Devices, in which I explained why the chip company has re-rating potential when taking into account that AMD has started to outgrow Nvidia in the data center segment.Intel, at this stage of the restructuring, is predominantly a turnaround investment, but Intel may also have the most upside in the short-term if the chip company can up-scale its own slate of AI accelerators in 2025.The likelihood of a new round of impairment and restructuring charges in 4Q24 is very low in my view, and I think that Intel has a good chance to return to profitability in 2025, particularly if Intel has some good news to report in terms of Gaudi®3 shipments at the end of the month.Why The Investment Thesis Could Not Work OutIf Intel messes up its restructuring and fails to turn its profit situation around in 2025, then Intel investors need to brace for a lackluster stock performance.The stock of the chip company has brutally disappointed in the last year, with a negative return of 55%. To provide a little of perspective: Nvidia is up 144% over the last year and Advanced Micro Devices, itself trailing behind Nvidia, is down 24%.However, a potentially drawn out restructuring as well as new impairment charges could hurt my contrarian investment thesis.My ConclusionIntel’s moment of truth is rapidly approaching as the fourth quarter earnings presentation on January 30, 2024 will be the first earnings report since the company’s disastrous 3Q24 in which it announced record impairments and ongoing operational challenges.Intel Foundry’s losses skyrocketed in the third quarter, but I think that the chip company has already incurred most of its expected impairment and restructuring charges in 3Q24.Therefore, with profit expectations being as low as they are and Intel potentially having some good news to report with regards to the up-scaling of Gaudi®3 chips, I think that Intel may have a solid chance of a re-rating, not only after January 30, 2024, but thereafter as well.In my view, Intel should not be written off just yet, as the company has considerable potential to monetize existing non-essential businesses and make a positive impact in its data center segment in 2025.","kind":"news","is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[{"id":395339885912672,"gmtCreate":1737533426416,"gmtModify":1737533429741,"author":{"id":"3574547619690492","authorId":"3574547619690492","name":"UTOtrader","avatar":"https://static.tigerbbs.com/82be6befb29ac8516e463638d3f659d5","vip":1,"crmLevel":5,"crmLevelSwitch":0,"idStr":"3574547619690492","authorIdStr":"3574547619690492"},"htmlText":"Buying","listText":"Buying","text":"Buying","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/395339885912672","repostId":1151488597,"repostType":4,"repost":{"id":"1151488597","kind":"news","pubTimestamp":1737438382,"share":"https://ttm.financial/m/news/1151488597?lang=&edition=fundamental","pubTime":"2025-01-21 13:46","market":"us","language":"en","title":"Intel: Moment of Truth Rapidly Approaching","url":"https://stock-news.laohu8.com/highlight/detail?id=1151488597","media":"Seeking Alpha","summary":"SummaryIntel's upcoming Q4 earnings could mark a turning point, with focus on restructuring progress and Gaudi3 AI accelerator up-scaling.Low expectations set the stage for potential outperformance in","content":"<html><head></head><body><h2 id=\"id_1081526900\">Summary</h2><ul style=\"\"><li><p>Intel&#39;s upcoming Q4 earnings could mark a turning point, with focus on restructuring progress and Gaudi®3 AI accelerator up-scaling.</p></li><li><p>Low expectations set the stage for potential outperformance in 2025, with Intel possibly returning to profitability and achieving a stock re-rating.</p></li><li><p>Intel&#39;s restructuring and impairment charges have weighed heavily, but positive news on Gaudi®3 could trigger a strong price reaction.</p></li><li><p>Despite past disappointments, Intel&#39;s potential to monetize non-essential businesses and improve data center performance suggests it shouldn&#39;t be written off yet.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/84030b6a8a7a9dfead8e937193679cc7\" alt=\"JHVEPhoto/iStock Editorial via Getty Images\" title=\"JHVEPhoto/iStock Editorial via Getty Images\" tg-width=\"750\" tg-height=\"500\"/><span>JHVEPhoto/iStock Editorial via Getty Images</span></p><p><strong>Intel Corporation (NASDAQ:INTC)</strong> will soon present its earnings for the fourth quarter, which could define a significant turning point for the chip company.</p><p>Investors will be looking forward to hearing news about Intel’s progress with regards to its restructuring program and, quite likely, to any kind of updates relating to the chip company’s up-scaling of AI accelerator Gaudi®3. The Gaudi®3 is Intel’s answer to the GPUs offered by its competitors <strong>Nvidia Corp. (NVDA) </strong>and <strong>Advanced Micro Devices Inc. (AMD) </strong>and could potentially profit from AI accelerators being in a kind of supply shortage.</p><p>Nvidia is obviously leading the market here, but both Advanced Micro Devices and Intel have developed their own AI accelerators in order to meet sizzling demand from the data center market.</p><p>If Intel avoids any new major impairments and restructuring charges, the chip company could indeed return to profitability in 2025 which in turn could precipitate a stock re-rating.</p><h2 id=\"id_3887705258\">My Rating History</h2><p>The latest restructuring of Intel was obviously a very defining event for the chip company, which triggered a considerable stock drop. As I pointed out in my last piece on Intel, however, the focus on the restructuring appeared to me to be a mistake as the chip company retains options to sell non-essential businesses such as Mobileye or Altera. Intel might announce a new set of strategic initiatives in order to right the ship at the chip company, including new savings measures.</p><p>I think the worst is behind Intel, and I am looking forward to seeing gradual improvements in operating performance, particularly as Intel starts to up-scale Gaudi®3 deliveries.</p><h2 id=\"id_1767323548\">Low Expectations Set The Stage For Outperformance Potential In 2025</h2><p>Though expectations for Intel’s fourth quarter are not high at all, the market clearly anticipates that the worst is already behind the chip company. Intel had a ‘kitchen-sink’ third quarter in which it threw everything at investors at once: Intel’s sales declined 6% YoY, the company recognized $15.9 billion in impairment charges and escalating operating losses in Intel Foundry.</p><p>In 3Q24, Intel Foundry, Mobileye and Altera all suffered sales declines, with Altera seeing a whopping 44% YoY sales decline. Altera is a non-essential business unit that supplies customers with end-to-end FPGAs. The only two segments that exhibited sales growth in the last quarter were Data Center and AI as well as Network and Edge which I also anticipate to remain solidly in positive sales growth territory in 4Q24.</p><p>Due to sales declines in Intel’s Client Computing, Intel’s core processor business, the chip company overall saw a disappointing 6% sales drop. I do think that with momentum building in data centers that Intel has a good chance of returning to positive sales growth in 4Q24. The main reason is the very strong earnings presentation of <strong>Taiwan Semiconductor Manufacturing Company (TSM) </strong>which already reported very robust sales growth for the month of December.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/e5ab9e701832eff5a4e02aa7f845b041\" alt=\"Business Unit Revenue And Trends (Intel Corporation)\" title=\"Business Unit Revenue And Trends (Intel Corporation)\" tg-width=\"640\" tg-height=\"272\"/><span>Business Unit Revenue And Trends (Intel Corporation)</span></p><p>Moreover, after Intel cleaned house in the third quarter, earnings for 4Q24 should look substantially better, that at least is my expectation when it comes to the chip company.</p><p>Intel is scheduled to makes its earnings presentation for 4Q24 on January 30, 2024 and expectations are not particularly high. The market consensus is presently anchored at $0.12 per share which does, however, reflect a turnaround from a reported loss of $0.46 per share in the prior quarter.</p><p>Only a slight profit beat, paired with a slightly optimistic outlook with regards to the progress of Intel’s restructuring, could trigger a possibly strong price reaction at the end of the month.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/559ef15841a3416dead9668b30eefc1f\" alt=\"Earnings And Revenues (Yahoo Finance)\" title=\"Earnings And Revenues (Yahoo Finance)\" tg-width=\"640\" tg-height=\"182\"/><span>Earnings And Revenues (Yahoo Finance)</span></p><h2 id=\"id_1246481800\">Intel’s Return To Profitability</h2><p>Intel is widely anticipated to report positive earnings in 2025 which would mark a stark contrast to 2024 figures. Intel is presently expected to earn $0.97 per share, on a full-year level, which reflects back to us a 22x profit multiple.</p><p>Nvidia and Advanced Micro Devices are selling for leading (2025) profit multiples of 31x and 24x. Both chip companies, however, are not bogged down by a restructuring and both companies also grew at more than 100% YoY in their data center segments.</p><p>Intel, on the other hand, only grew its sales 9% YoY, but taking into account the overall tight supply of AI accelerators, I think that Intel does have potential to grow sales faster in 2025, predominantly because of the Gaudi®3 AI accelerator. Gaudi®3 is poised to see a substantial up-scaling in 2025 which could aid a re-rating of Intel’s stock.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/cfd17a7cdb00b86f6e21632700bcc467\" alt=\"Earnings Estimate (Yahoo Finance)\" title=\"Earnings Estimate (Yahoo Finance)\" tg-width=\"640\" tg-height=\"192\"/><span>Earnings Estimate (Yahoo Finance)</span></p><p>Obviously, Intel’s ongoing restructuring and uncertainty about a new round of impairment charges as well as slow growth in the data center segment so far have all been reasons for the big valuation discount relative to Intel’s competitors.</p><p>If you want to focus on growth and market dominance, I think Nvidia is far and away the best chip stock to own, not least because of Nvidia’s own up-scaling of its Blackwell chip.</p><p>Advanced Micro Devices might be more a sentiment investment here as investors, in my view, underestimate AMD’s accelerating growth in data centers. I recently penned a piece on Advanced Micro Devices, in which I explained why the chip company has re-rating potential when taking into account that AMD has started to outgrow Nvidia in the data center segment.</p><p>Intel, at this stage of the restructuring, is predominantly a turnaround investment, but Intel may also have the most upside in the short-term if the chip company can up-scale its own slate of AI accelerators in 2025.</p><p>The likelihood of a new round of impairment and restructuring charges in 4Q24 is very low in my view, and I think that Intel has a good chance to return to profitability in 2025, particularly if Intel has some good news to report in terms of Gaudi®3 shipments at the end of the month.</p><h2 id=\"id_2337268560\">Why The Investment Thesis Could Not Work Out</h2><p>If Intel messes up its restructuring and fails to turn its profit situation around in 2025, then Intel investors need to brace for a lackluster stock performance.</p><p>The stock of the chip company has brutally disappointed in the last year, with a negative return of 55%. To provide a little of perspective: Nvidia is up 144% over the last year and Advanced Micro Devices, itself trailing behind Nvidia, is down 24%.</p><p>However, a potentially drawn out restructuring as well as new impairment charges could hurt my contrarian investment thesis.</p><h2 id=\"id_1860302175\">My Conclusion</h2><p>Intel’s moment of truth is rapidly approaching as the fourth quarter earnings presentation on January 30, 2024 will be the first earnings report since the company’s disastrous 3Q24 in which it announced record impairments and ongoing operational challenges.</p><p>Intel Foundry’s losses skyrocketed in the third quarter, but I think that the chip company has already incurred most of its expected impairment and restructuring charges in 3Q24.</p><p>Therefore, with profit expectations being as low as they are and Intel potentially having some good news to report with regards to the up-scaling of Gaudi®3 chips, I think that Intel may have a solid chance of a re-rating, not only after January 30, 2024, but thereafter as well.</p><p>In my view, Intel should not be written off just yet, as the company has considerable potential to monetize existing non-essential businesses and make a positive impact in its data center segment in 2025.</p></body></html>","source":"lsy1728464409321","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; 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height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nIntel: Moment of Truth Rapidly Approaching\n</h2>\n\n<h4 class=\"meta\">\n\n\n2025-01-21 13:46 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4750705-intel-moment-of-truth-rapidly-approaching><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryIntel's upcoming Q4 earnings could mark a turning point, with focus on restructuring progress and Gaudi®3 AI accelerator up-scaling.Low expectations set the stage for potential outperformance ...</p>\n\n<a href=\"https://seekingalpha.com/article/4750705-intel-moment-of-truth-rapidly-approaching\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://seekingalpha.com/article/4750705-intel-moment-of-truth-rapidly-approaching","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1151488597","content_text":"SummaryIntel's upcoming Q4 earnings could mark a turning point, with focus on restructuring progress and Gaudi®3 AI accelerator up-scaling.Low expectations set the stage for potential outperformance in 2025, with Intel possibly returning to profitability and achieving a stock re-rating.Intel's restructuring and impairment charges have weighed heavily, but positive news on Gaudi®3 could trigger a strong price reaction.Despite past disappointments, Intel's potential to monetize non-essential businesses and improve data center performance suggests it shouldn't be written off yet.JHVEPhoto/iStock Editorial via Getty ImagesIntel Corporation (NASDAQ:INTC) will soon present its earnings for the fourth quarter, which could define a significant turning point for the chip company.Investors will be looking forward to hearing news about Intel’s progress with regards to its restructuring program and, quite likely, to any kind of updates relating to the chip company’s up-scaling of AI accelerator Gaudi®3. The Gaudi®3 is Intel’s answer to the GPUs offered by its competitors Nvidia Corp. (NVDA) and Advanced Micro Devices Inc. (AMD) and could potentially profit from AI accelerators being in a kind of supply shortage.Nvidia is obviously leading the market here, but both Advanced Micro Devices and Intel have developed their own AI accelerators in order to meet sizzling demand from the data center market.If Intel avoids any new major impairments and restructuring charges, the chip company could indeed return to profitability in 2025 which in turn could precipitate a stock re-rating.My Rating HistoryThe latest restructuring of Intel was obviously a very defining event for the chip company, which triggered a considerable stock drop. As I pointed out in my last piece on Intel, however, the focus on the restructuring appeared to me to be a mistake as the chip company retains options to sell non-essential businesses such as Mobileye or Altera. Intel might announce a new set of strategic initiatives in order to right the ship at the chip company, including new savings measures.I think the worst is behind Intel, and I am looking forward to seeing gradual improvements in operating performance, particularly as Intel starts to up-scale Gaudi®3 deliveries.Low Expectations Set The Stage For Outperformance Potential In 2025Though expectations for Intel’s fourth quarter are not high at all, the market clearly anticipates that the worst is already behind the chip company. Intel had a ‘kitchen-sink’ third quarter in which it threw everything at investors at once: Intel’s sales declined 6% YoY, the company recognized $15.9 billion in impairment charges and escalating operating losses in Intel Foundry.In 3Q24, Intel Foundry, Mobileye and Altera all suffered sales declines, with Altera seeing a whopping 44% YoY sales decline. Altera is a non-essential business unit that supplies customers with end-to-end FPGAs. The only two segments that exhibited sales growth in the last quarter were Data Center and AI as well as Network and Edge which I also anticipate to remain solidly in positive sales growth territory in 4Q24.Due to sales declines in Intel’s Client Computing, Intel’s core processor business, the chip company overall saw a disappointing 6% sales drop. I do think that with momentum building in data centers that Intel has a good chance of returning to positive sales growth in 4Q24. The main reason is the very strong earnings presentation of Taiwan Semiconductor Manufacturing Company (TSM) which already reported very robust sales growth for the month of December.Business Unit Revenue And Trends (Intel Corporation)Moreover, after Intel cleaned house in the third quarter, earnings for 4Q24 should look substantially better, that at least is my expectation when it comes to the chip company.Intel is scheduled to makes its earnings presentation for 4Q24 on January 30, 2024 and expectations are not particularly high. The market consensus is presently anchored at $0.12 per share which does, however, reflect a turnaround from a reported loss of $0.46 per share in the prior quarter.Only a slight profit beat, paired with a slightly optimistic outlook with regards to the progress of Intel’s restructuring, could trigger a possibly strong price reaction at the end of the month.Earnings And Revenues (Yahoo Finance)Intel’s Return To ProfitabilityIntel is widely anticipated to report positive earnings in 2025 which would mark a stark contrast to 2024 figures. Intel is presently expected to earn $0.97 per share, on a full-year level, which reflects back to us a 22x profit multiple.Nvidia and Advanced Micro Devices are selling for leading (2025) profit multiples of 31x and 24x. Both chip companies, however, are not bogged down by a restructuring and both companies also grew at more than 100% YoY in their data center segments.Intel, on the other hand, only grew its sales 9% YoY, but taking into account the overall tight supply of AI accelerators, I think that Intel does have potential to grow sales faster in 2025, predominantly because of the Gaudi®3 AI accelerator. Gaudi®3 is poised to see a substantial up-scaling in 2025 which could aid a re-rating of Intel’s stock.Earnings Estimate (Yahoo Finance)Obviously, Intel’s ongoing restructuring and uncertainty about a new round of impairment charges as well as slow growth in the data center segment so far have all been reasons for the big valuation discount relative to Intel’s competitors.If you want to focus on growth and market dominance, I think Nvidia is far and away the best chip stock to own, not least because of Nvidia’s own up-scaling of its Blackwell chip.Advanced Micro Devices might be more a sentiment investment here as investors, in my view, underestimate AMD’s accelerating growth in data centers. I recently penned a piece on Advanced Micro Devices, in which I explained why the chip company has re-rating potential when taking into account that AMD has started to outgrow Nvidia in the data center segment.Intel, at this stage of the restructuring, is predominantly a turnaround investment, but Intel may also have the most upside in the short-term if the chip company can up-scale its own slate of AI accelerators in 2025.The likelihood of a new round of impairment and restructuring charges in 4Q24 is very low in my view, and I think that Intel has a good chance to return to profitability in 2025, particularly if Intel has some good news to report in terms of Gaudi®3 shipments at the end of the month.Why The Investment Thesis Could Not Work OutIf Intel messes up its restructuring and fails to turn its profit situation around in 2025, then Intel investors need to brace for a lackluster stock performance.The stock of the chip company has brutally disappointed in the last year, with a negative return of 55%. To provide a little of perspective: Nvidia is up 144% over the last year and Advanced Micro Devices, itself trailing behind Nvidia, is down 24%.However, a potentially drawn out restructuring as well as new impairment charges could hurt my contrarian investment thesis.My ConclusionIntel’s moment of truth is rapidly approaching as the fourth quarter earnings presentation on January 30, 2024 will be the first earnings report since the company’s disastrous 3Q24 in which it announced record impairments and ongoing operational challenges.Intel Foundry’s losses skyrocketed in the third quarter, but I think that the chip company has already incurred most of its expected impairment and restructuring charges in 3Q24.Therefore, with profit expectations being as low as they are and Intel potentially having some good news to report with regards to the up-scaling of Gaudi®3 chips, I think that Intel may have a solid chance of a re-rating, not only after January 30, 2024, but thereafter as well.In my view, Intel should not be written off just yet, as the company has considerable potential to monetize existing non-essential businesses and make a positive impact in its data center segment in 2025.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":7,"commentSize":1,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}