Intel Q4 2024 earnings preview: can AI momentum drive semiconductor growth?​

​​​When is Intel reporting?

Intel Corporation is set to announce its fourth quarter (Q4) and full-year 2024 financial results on Friday, 31 January 2025 at 5.00am SGT, after market close.

An earnings conference call is scheduled for 9.00am AEDT on the same day to discuss the results.

Company backdrop

Intel shares are under scrutiny as investors evaluate the company's progress in artificial intelligence (AI) chip development and manufacturing. Market attention is focused on data centre revenue growth and the uptake of AI acceleration products.

​Intel's focus on AI and foundry services is pivotal. The introduction of the Gaudi3 AI accelerator aims to strengthen Intel's position in the AI market. Additionally, the expansion of Intel Foundry Services is expected to contribute to long-term growth.

Intel earnings expectations

Q4 projections

• ​Revenue: $13.81 billion, indicating growth of 10% year-over-year (YoY)
• ​Earnings per share (EPS): $0.12, down from $0.54 in Q4 2023

Key business segments

• Client Computing Group (CCG) : expected to generate $8.32 billion in revenue, a 25.7% YoY increase, driven by recovering personal computer (PC) demand and new product launches
• Data Centre and AI (DCAI): projected revenues of $4.10 billion, a 4.6% decrease from the previous year, reflecting competitive pressures in the data centre market
• Network and Edge (NEX): anticipated revenues of $1.55 billion, marking a 25% YoY decline, influenced by market dynamics and strategic shifts.

​Market performance

Over the past year, Intel's stock has declined by approximately 55%, significantly underperforming compared to the Nasdaq 100 and S&P 500, which both gained around 25%

​Intel versus Nasdaq 100 and S&P 500 1-year comparison chart

Key factors contributing to downturn

• ​Competitive pressures and market position

Intel has faced increased competition from companies like Advanced Micro Devices (AMD) and NVIDIA, particularly in the AI and graphics processing unit (GPU) markets. Difficulties in penetrating the AI chip market have raised concerns about Intel's ability to maintain its market share.

• Leadership instability

​The abrupt retirement of chief executive officer (CEO) Pat Gelsinger in December 2024, reportedly at the board's behest due to dissatisfaction with the pace of Intel's turnaround efforts, added to investor uncertainty. Gelsinger's departure underscored challenges in executing strategic initiatives aimed at revitalising the company.

• ​Financial performance and strategic missteps

Intel reported a $1.6 billion loss in the second quarter (Q2) of 2024, leading to significant cost-cutting measures, including plans to reduce the workforce by about 15,000 roles (15% of its workforce) to achieve $10 billion in cost savings by 2025. Furthermore, the company's foundry business reported substantial losses, with projections indicating it would not break even before 2027.

​Intel analyst ratings

​According to London Stock Exchange Group (LSEG) Data & Analytics, analysts rate Intel shares as a ‘hold’ with 1 ‘strong buy’, 2 ‘buy’, 37 ‘hold’, 5 ‘sell’ and 1 ‘strong sell’ (as of 23 January 2025).

LSEG recommendation chart

TipRanks assigned Intel a Smart Score of ‘5 Neutral’ and rated it as a ‘hold’ by analysts with 1 ’buy’, 22 ‘hold’ and 4 'sell' recommendations (as of 23 January 2025).

TipRanks recommendation chart

What to watch for?

• CCG performance will reflect the health of the PC market and Intel's market share
• Updates on manufacturing progress and capacity expansion are essential for maintaining investor confidence
• The market will focus on 2025 revenue and margin projections
• Capital expenditure (capex) plans could sway investor sentiment
• Updates on the AI product roadmap are crucial for growth expectations
• The industry demand outlook will guide inventory management strategies.

Intel technical analysis

Intel's share price recently rebounded from its mid-January low of $18.73, close to the $18.51 September low. It is currently testing its 2024 - 2025 downtrend line at $22.45, which acts as a resistance level.

Breaking through this downtrend line is necessary for Intel's share price to reverse its decline, as October and December 2022 and February 2023 lows present significant resistance at $24.59 - $25.35.

For a medium-term bullish reversal to gain momentum, the price needs to rise and close weekly above the May 2023 low and the November 2024 high at $26.43 - $26.86.

Failure to hold above the September 2024 and January lows at $18.73 - $18.51 could see the August 2010 trough at $17.60 come into play.

​Intel weekly candlestick chart