Intel Corporation nasdaq Intc Shares Surge on Bullish Q4 Forecast

Intel Corporation (NASDAQ: INTC) Shares Surge on Bullish Q4 Forecast

Intel Corporation (NASDAQ: INTC) shares soared in the pre-market trading Friday following an optimistic outlook for the fourth quarter. The chip giant foresees a return to sales growth driven by a rebound in the personal computer market and a more competitive product line.

Intel expects sales in the upcoming quarter to range between $14.6 billion and $15.6 billion, beating the average analyst estimate of $14.4 billion. Additionally, the company expects a profit of 44 cents per share, excluding certain items. This outperforms the analyst estimate of 31 cents, as per Bloomberg data.

This upbeat outlook reflects the growing momentum of Intel’s turnaround efforts under the leadership of Chief Executive Officer Pat Gelsinger. Intel Corporation (NASDAQ: INTC) believes that its primary business unit, the PC market, is emerging from a historic slump caused by inventory buildup. However, Intel server unit continues to face challenges due to a shift in customer spending toward chips made by NVIDIA Corporation (NASDAQ: NVDA).

Intel stock, which had already risen by 23% this year, jumped nearly 8% in the pre-market trading following the late Thursday announcement. This marks the third time investors have responded positively to the company’s quarterly report. That helped Intel keep pace with the broader rally in the chip industry stocks this year, fueled by optimism that increased demand for artificial intelligence will drive growth.

Speaking to analysts on a call, Intel CEO Pat Gelsinger described the quarter as a step forward in the company’s plan to regain leadership in the chip industry. He also highlighted Intel’s success in acquiring new customers for its outsourced manufacturing division.

While expressing optimism about the progress, Gelsinger stated,

“While we’re encouraged by our progress to date, we know we have much more work in front of us.”

Intel Corporation (NASDAQ: INTC) forecasts its adjusted gross margin for the fourth quarter to be 46.5%, surpassing the estimate of 44.2%. This metric reflects the productivity of Intel’s multibillion-dollar factory network. The company aims to restore it to levels seen at the peak of its power, where the gross margin was well over 60%.

Chief Financial Officer Dave Zinsner expressed confidence that Intel can restore its margins to the former levels once it regains technological leadership in chip production.

In the third quarter, Intel reported earnings of 41 cents per share on sales of $14.2 billion, outshining analyst estimates of 21 cents in profit and $13.5 billion in revenue.

Client computing generated $7.87 billion in revenue in the last quarter, surpassing the estimated $7.4 billion. Data center sales reached $3.8 billion, slightly below the average projection of $3.94 billion. Gelsinger projected that the data center market is on track for annual shipments of approximately 270 million units and is expected to grow to around 300 million.