Intel faces high earnings bar as stock soars and cash pours in

"Investors will be looking beyond the bottom line in chipmaker Intel Corp.'s third-quarter earnings after a wave of investments from the White House, Nvidia Corp. and Softbank Group Corp. sent the stock soaring 86% in less than three months. The rally has been so steep that several analysts cut their ratings in recent weeks due to worries about the shares rising too far, too fast, as Bank of America wrote in a note to clients last week lowering Intel to underperform from neutral."

"The surge in enthusiasm is also making Intel shares increasingly expensive. They're now priced at 63 times expected earnings over the next 12 months, up from around 20 in January, placing the company among the 15 most expensive members of the S&P 500 Index. The leap is particularly striking because it has been almost exactly a year since Intel was removed from the Dow Jones Industrial Average, which it joined in 1999, and replaced by rival and artificial intelligence darling Nvidia."

"The shares took a hit on Wednesday after the Trump administration said it's weighing export restrictions against China that target the technology industry, closing down 3.2% at $36.92, which is still well above its consensus 12-month price target of $28.80. The Philadelphia Stock Exchange Semiconductor Index fell 2.4%, with all but one member closing in the red. There's broad sentiment on Wall Street that Intel's latest earnings report, due after the bell on Thursday, is going to disappoint,"

Intel's shares climbed 86% in under three months after investments from the White House, Nvidia and Softbank, pushing the stock into the top 15 most expensive S&P 500 members by forward earnings. Several analysts cut ratings amid concern the rally ran too far, too fast. The stock now trades around 63 times expected earnings over the next 12 months, up from roughly 20 in January. The rally follows Intel's removal from the Dow almost a year earlier and was trimmed when news of possible U.S. export restrictions on China knocked the shares lower. Wall Street expects the upcoming quarterly report to disappoint, and investors are seeking details on how Intel will navigate economic headwinds, execute cost-cutting and position for longer-term growth.

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