What To Expect From Intel's Q4 This Week

With continued market demand for PCs and a strong lineup of microprocessing technology, Intel Corporation (NASDAQ: INTC) has earned the confidence of Wells Fargo Securities analysts leading up to its fourth-quarter earnings report.

As of Friday, the stock remained the firm’s top pick, and senior analyst David Wong reiterated an Outperform rating with a valuation between $40 and $50.

Rating, Justification

Wong expects the January 26 quarterly summary to present solid revenue growth in Intel’s Data Center Group either on par with or surpassing the third-quarter rate of 9.7 percent.

He also predicted strong figures in client computing group sales despite the company’s guidance report anticipating a decline. Based on the expansion of peer corporations’ expanded notebook sales, Wong said Intel may have surpassed poor expectations that reflected a reduction in global PC supply chain inventory.

Considering all factors, Wong estimated fourth-quarter revenue of about $15.7 billion — right in line with guidance.

A Look Forward

The analyst predicted positive stock activity throughout 2017 inspired by significant growth in revenue, stability in client computing group sales and positive effects of recent restructuring on margins.

Although Intel maintains a “dominant position” in the market, Wong acknowledged investment risks including rising capital spending, competition from Advanced Micro Devices, Inc. (NASDAQ: AMD) and possible deceleration of growth in PC shipments.

Intel closed Friday trading up 1.01 percent at $36.94.