US Stock Earnings Preview: Can Intel Reverse Its Troubles? A Crucial Moment Awaits

Intel is set to release its fourth-quarter 2024 earnings report after the market closes on January 30, 2025, Eastern Time. This could mark a significant turning point for the chip company.

Investors are eager to hear about the progress of Intel's restructuring plan in this earnings report. Recently, there were rumors in the market that Intel has become the acquisition target of "a certain company".

As for this "certain company", some believe it could be "Tesla", while others think it might be "Qualcomm". Similarly, SoftBank, Apple, and Broadcom have also been considered as potential acquirers of Intel. However, in my opinion, the first two are more likely.

From being the global chip hegemon to a potential acquisition target, Intel's CEO, Pat Gelsinger, publicly admitted that "the company has not fully benefited from the AI wave. Costs are too high, and profits are too low."

Indeed, after two consecutive quarters of losses, Intel's financial deficit widened further to $16.639 billion in the third quarter of this year. The total loss in the first three quarters reached $18.728 billion.

What's even more disheartening is that Intel's market capitalization has shrunk dramatically from $290 billion in 2020 to just over $93 billion, a decrease of more than 300%, which is rare for the company in the past 30 years. Moreover, Intel's stock price has plummeted by nearly 60% this year. Helplessly, the company made the decision to suspend dividend payments for the first time in 32 years.

When a wall is about to collapse, everyone gives it a push. S&P Dow Jones Indices recently removed Intel from the Dow Jones Industrial Average. Intel, which had been a component of the Dow for 25 years, left in dismay. At the same time, Intel ranked 62nd on the Fortune 500 list in the United States last year, but dropped to 79th in 2024.

Looking back at Intel's past 20 years, apart from its tenacious dedication to CPUs and its deep - rooted presence in the PC field, it seems to have little to show for in other aspects. Its once - glorious chip foundry business has now become a burden. After missing the golden ages of mobile communication and misjudging the GPU, Intel has also failed to keep up with the boom of generative AI.

Although the market's expectations for Intel's fourth quarter are not high, it is generally believed that the worst period for this chip company has passed.

There is a widespread expectation that Intel will report positive earnings in 2025, which will be in sharp contrast to the 2024 data. Currently, Intel's expected earnings per share for the whole year is $0.97, reflecting a price-to-earnings multiple of 22.

This fourth-quarter earnings report will be a crucial moment for Intel, as it will be the company's first earnings report since the disastrous performance announcement in the third quarter of 2024, which included record-breaking impairments and ongoing operational challenges.

Although the losses of Intel's foundry business soared in the third quarter, the chip company had already borne most of the expected impairments and restructuring costs in 3Q24.

Therefore, with such low profit expectations and the possibility that Intel may bring some good news regarding the Gaudi®3 chip upgrade, there is a high chance that Intel will be re - rated.

In my view, Intel should not be completely written off. This chip giant has no way back.

The market is eagerly awaiting this earnings report.$INTC