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Intel (INTC) Surges 6.4%: Is This an Indication of Further Gains?
Intel (INTC - Free Report) shares ended the last trading session 6.4% higher at $20.91. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 5.8% loss over the past four weeks.
Intel recently secured direct funding of up to $3 billion from the U.S. government for several defense programs. The company also inked a multi-year, multi-billion dollar deal with Amazon Web Services. Per the agreement, Intel will develop AI chips leveraging its 18A chip fabrication procedure and also produce custom Xeon 6 chips for AWS. Intel's foundry business is expected to receive a significant boost from these developments. Moreover, to improve profitability, management has initiated a stringent cost-cutting plan that includes structural and operational realignment across the company. These factors have instilled investor optimism, which probably propelled the share price appreciation.
This world's largest chipmaker is expected to post quarterly loss of $0.03 per share in its upcoming report, which represents a year-over-year change of -107.3%. Revenues are expected to be $13.01 billion, down 8.1% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Intel, the consensus EPS estimate for the quarter has been revised 2.2% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on INTC going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Intel is part of the Zacks Semiconductor - General industry. Texas Instruments (TXN - Free Report) , another stock in the same industry, closed the last trading session 0.7% lower at $198.47. TXN has returned -0.3% in the past month.
For Texas Instruments, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.36. This represents a change of -24.4% from what the company reported a year ago. Texas Instruments currently has a Zacks Rank of #3 (Hold).