* Reports Q1 2020 results on Thursday, April 23, after market closes
* Expected sales: $ 18.63 billion
* EPS forecast: $ 1.28
Intel & # 39; s largest chip maker, Intel (NASDAQ :), will be scrutinized when it reports Q1 earnings as investors justify the surge in its stock following corona virus-induced sell-off and the company is well positioned to perform better than its peers.
Intel outperformed the benchmark this year, dropping just under 6%, while the index was down 14% on concerns that the deadly pandemic would hurt demand for chips and cut supply chains. Intel shares closed at $ 56.36 per share yesterday, after falling about 5%.
While these concerns still persist, Intel's solid balance, along with the lockdown-fueled demand surge in the notebook and cloud computing segments, provides significant resilience to help weather the current storm.
Robust Sales Behavior Revenue
Even before the corona virus outbreak, Intel had seen it take advantage of robust sales of its high-margin products, including the most advanced data center processors.
That surge in demand increases was significantly higher than analysts expected for the fourth quarter, aided by continued strong shipments to data centers from the world's largest cloud computing companies, such as Amazon (NASDAQ 🙂 and Microsoft ( NASDAQ:).
Intel should also report stronger sales than expected for chips used in personal computers. According to the global consultant, NPD, orders worldwide are increasing sales of computer accessories such as keyboards, mice, monitors and laptops.
NPD said sales of computer monitors doubled in the first two weeks of March, while notebook sales to businesses grew 30% year-on-year in the last week of February and rose 50% in the first two weeks of March. began to equip their employees for home work.
One of the major obstacles to Intel's share price last year was that the company had fallen behind with the introduction of its new chip technology, which many analysts believe should be one of the main drivers of growth.
Continuing delays in this area allowed Intel rivals, including Taiwan Semiconductor Manufacturing (NYSE 🙂 and Advanced Micro Devices (NASDAQ :), to jump ahead by rolling out their own cheaper, better performing chips.
After spending a record amount in 2019 to keep up with the most advanced technologies in the world, Intel is now catching up with competitors in this segment, accelerating mass production of the smallest transistors it has ever made. . about 10 nanometers long, or less than 10 thousandth the width of a human hair.
Bottom Line
With a price-earnings ratio of 12.5, Intel stock still looks cheap. The wide canal and massive R&D spending keep the stocks a good long-term bet despite some competitive pressure.
In addition, the stock pays an annual dividend of $ 1.32 per share, for a current return of 2.23%; the payout amount has increased by 7% per year, making it an attractive option to include in an investment portfolio when a recession is imminent.
