Intel stock (NASDAQ: INTC) fell 1.74% in Tuesday’s premarket trading before reversing course during the regular session, a day after JPMorgan upgraded the chipmaker and nine days before its third-quarter earnings report. INTC traded at $92.62, up approximately 0.6%, as of 2:16 p.m. Eastern time on October 20.The reversal followed Monday’s 2.43% gain, when Intel closed at $92.03 after JPMorgan analyst Harlan Sur upgraded the shares to Neutral from Underweight while maintaining an $85 price target. The stock had climbed more than 4% in Monday’s premarket session before surrendering part of that advance.Intel’s upcoming October 29 earnings report is expected to show adjusted earnings of $0.40 per share on revenue of $16.50 billion, according to analyst consensus figures compiled by TipRanks.The latest moves come as semiconductor investors reassess the costs of artificial intelligence infrastructure and the prospects for Intel’s turnaround under Chief Executive Lip-Bu Tan.
Why Did INTC Stock Fall in Tuesday’s Premarket Trading?
Intel dropped 1.74% before Tuesday’s opening bell, according to a TipRanks report published at 11:56 UTC. Advanced Micro Devices declined 1.96%, while Nvidia and Broadcom fell 0.59% and 0.61%, respectively.A separate report from Quartz put Intel’s decline at approximately 1.2%, alongside a 2.2% drop in Micron Technology. The different readings reflect separate premarket snapshots rather than conflicting closing prices.By Tuesday afternoon, however, Intel had recovered its earlier losses. The shares had traded between approximately $88.78 and $93.73 during the regular session, highlighting the volatility surrounding semiconductor stocks.The initial weakness came as investors renewed their scrutiny of AI infrastructure spending, particularly the debt and capital expenditures required to expand computing capacity.Monday’s recovery had briefly interrupted that pressure. Reuters reported that the Philadelphia Semiconductor Index rose after eight consecutive declining sessions, its longest losing streak since 2008. The iShares Semiconductor ETF separately ended a nine-session losing streak.FinanceFeeds examined the semiconductor index’s eight-session decline, including Friday’s 3.83% fall and the differing performance of semiconductor ETFs.
Why JPMorgan Upgraded Intel but Kept Its $85 Target
JPMorgan analyst Harlan Sur upgraded Intel to Neutral from Underweight on October 19, ending a negative recommendation that Yahoo Finance reported had been in place since November 2022.The bank maintained its $85 price target, indicating that the upgrade was primarily a reassessment of risk rather than a new bullish valuation.Sur described Intel’s risk-reward profile as “much more balanced” following a decline of approximately 36% from its June peak, compared with losses of roughly 20% to 25% across the broader semiconductor group.Intel’s 52-week high stands at $142.35, reached during June’s rally. At Tuesday afternoon’s $92.62 price, the stock remained approximately 35% below that peak and more than 8% above JPMorgan’s unchanged target.Sur cited improving execution under CEO Lip-Bu Tan, progress in advanced manufacturing and stronger opportunities in server processors and custom chips.He also argued that increasingly CPU-intensive agentic AI workloads and constrained leading-edge manufacturing capacity could support positive earnings revisions through 2027.However, JPMorgan remains cautious about Intel’s competitive position. Sur highlighted the company’s declining server CPU market share, estimating that its share of x86 server processor revenue had fallen from 77% in 2022 to approximately 53%.He expects additional share losses over the coming quarters, particularly in servers.The upgrade therefore reflects greater confidence in Intel’s operational recovery without assuming that it has resolved its competitive challenges against AMD and other chipmakers.
What Does Tesla’s 14A Manufacturing Commitment Mean for Intel?
Intel’s foundry ambitions remain another important part of the investment case, with Tesla’s planned use of its forthcoming 14A manufacturing technology attracting investor attention.However, the Tesla development was not first announced on October 19. Elon Musk said in April that the Terafab initiative planned to use Intel’s 14A process. Reuters reported that statement at the time, while noting that Intel had not independently confirmed the arrangement.The distinction matters because a publicly discussed manufacturing commitment is not equivalent to disclosed production volumes, binding purchase guarantees or a quantified revenue contract.Intel’s 14A technology is intended to support its next generation of advanced semiconductor manufacturing, with high-volume production planned for 2028.The company has made progress in manufacturing yields and customer evaluations, but its external foundry business remains small compared with established industry leader TSMC.Investors also face uncertainty over Terafab’s eventual manufacturing structure. FinanceFeeds previously reported on Musk’s confirmation of discussions with TSMC concerning the project, raising questions about how manufacturing responsibilities could ultimately be divided.For Intel, the next meaningful development would be disclosure of a firm customer agreement, production commitments or expected foundry revenue rather than another expression of interest.
Intel’s October 29 Earnings: Analysts Expect $0.40 EPS
Intel confirmed on October 6 that it will publish third-quarter 2026 financial results on Thursday, October 29, after the US stock market closes. Management will hold an earnings conference call at 2 p.m. Pacific time, equivalent to 5 p.m. Eastern.According to TipRanks, analysts expect adjusted earnings of $0.40 per share, compared with $0.23 in the corresponding quarter last year. Revenue is projected at $16.50 billion, representing approximately 21% year-over-year growth from $13.65 billion.The revenue estimate falls within Intel’s own third-quarter guidance of $15.8 billion to $16.8 billion, which management provided during its July earnings announcement.Investors will be watching whether stronger demand for server processors translates into higher revenue and margins, particularly as AI inference applications increase demand for conventional CPUs alongside specialized accelerators.Another focus will be the profitability of Intel Foundry, where advanced manufacturing investment continues to require substantial spending before additional external customer revenue materializes.The October 29 report also offers management an opportunity to update investors on 18A manufacturing yields, the 14A development roadmap and progress in securing customers.FinanceFeeds’ recent Intel stock analysis examined the shares’ decline ahead of earnings, including the company’s revenue guidance and the valuation challenges facing its turnaround.Tuesday’s recovery from a 1.7% premarket decline shows how quickly sentiment can shift after an analyst upgrade. But with JPMorgan’s $85 target still below the market price, the central question remains whether Intel’s October 29 results can provide enough evidence of stronger earnings, improving manufacturing economics and sustained CPU demand to support its valuation.
By admin
57148 views