Zacks
0
All posts from Zacks
Zacks in Our Research. Your Success.,

Intel's Data Center and Cloud Computing Business Set To Climb

This week, over 30% of S&P 500 companies are set to release their third-quarter earnings reports, and one of the most noteworthy firms on this list of giants is the largest semiconductor maker in the world, Intel INTC.

Investors will want to pay close attention to Intel when it reports its third-quarter earnings on Thursday, as its results could underscore the growth of several major tech sector trends.

The company is currently a Zacks Rank #1 (Strong Buy) and sports an overall VGM grade of “B.” And though shares of Intel have gained only 12.57% this year, which is less than the S&P 500 and well below the industry’s average gain, the stock does currently rest firmly near its 52-week high.

These lofty heights can be attributed to Intel’s 15% climb over the last 12-weeks, including a nearly 10% gain in the last month alone. However, Nvidia NVDA, AMD AMD, and other semiconductor companies have helped to curb Intel’s sector-wide dominance.

In Q3, we expect Intel to post earnings of 80 cents per share and revenues of $15.71 billion, based on our latest consensus estimates, and intense competition among the top semiconductor players is part of the reason for these relatively flat projections.

Yet, for the full-year, Intel is expected to post earnings growth of 10.7% and revenue growth of 3.3%. This should be good news for investors, but as we know, revenue and earnings are not the only things that matter.

More detailed dives into Intel’s third-quarter are needed in order to gain a better understanding of the company’s current strength. This is where we can check our exclusive non-financial metrics estimates file to help determine how some of Intel’s specific divisions, including its vitally important Data Center Group, are expected to perform.

These important stock drivers are from our exclusive non-financial metrics consensus estimate file. These estimates are updated daily and are based on the independent research of expert stock analysts. Learn more here>>>

Intel’s Data Center business accounts for nearly half of the company’s operating margin. The company expects Data Center segment revenue, which includes cloud computing and large servers, will grow 15% through 2018.

Based on our current consensus estimates, we expect Intel’s Data Center Group revenues will climb over 6% in Q3, from $4.54 billion to $4.82 billion. The company’s enterprise-focused segment has grown as the demand for data storage and high-performance networks has increased exponentially.

As the number of smartphones and internet-connected devices grows, coupled with the rise of artificial intelligence and cloud computing, Intel’s Data Center business will expand. And our current Q3 growth projection for this large business segment should make many investors very happy.

For more stock-moving estimates ahead of Intel’s Q3 report, check out our full guide: 3 Key Estimates for Intel's Q3 Earnings Report.

And make sure to check back here for our full analysis of Intel’s actual results later this week!

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Intel Corporation (INTC): Free Stock Analysis Report
 
Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report
 
NVIDIA Corporation (NVDA): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research