Opinions Vary On Whether Intel's Q2 Beat Will Continue Through Rest Of The Year

The mood is mixed on the prospects of Intel Corporation (NASDAQ: INTC) outperforming its forecasts in the coming quarters, even though the chip maker managed to exceed expectations on the strength of firmer PC demand in the just-completed quarter.

Charter Equity Research’s Edward Snyder maintained his Buy rating on the stock, saying “the probability of Intel not out-performing” consensus forecasts for the next two quarters “seems remote.”

“Larger trends suggest steadily improving demand across several groups,” he wrote. “Consistently strong performance in Client Computing (CCG) compelled the upside to guidance but the ramp of memory products (NAND, 3D Crosspoint) and (server platform) Purley’s arrival at data centers also bode well for 2018.”

Related Link: Analyst Says AMD Will Gain Data Center Share, But Intel Will Continue Its Leadership

On The Other Hand ...

BMO analyst Ambrish Srivastava maintained a Market Perform and set a price target of $34. Intel was up 1.3 percent at publication Friday and selling at $35.42. He said Intel outperforming the next two quotes seemed “remote.”

“We were not particularly impressed by Intel’s beat and higher guide,” he wrote. “Upside in 2Q came from the PC business, which is also factored into the upside for the FY revenue raise, along with contribution from Mobileye.”

“We say we may be intrigued because we have not recommended the shares for over two years now and we have seen capitulation from the long-term bulls on the Street.”

Both analysts attributed Intel’s beat to some recovery in the PC business. Total revenues of $14.8 billion were ahead of BMO’s expectation of $14.4 billion, and EPS of $0.58 exceeded its modeled $0.53.