Intel shares have jumped 235% in the past year. However, Thursday’s first-quarter earnings are expected to show that the company’s financial results still trail its rising stock price. Investors are betting on a long-term manufacturing turnaround, with Tesla as a key new customer.
Wall Street expects Intel to report first-quarter adjusted earnings of 2 cents per share, down from 13 cents a year ago, on revenue of $12.4 billion, which is a 2% drop from last year. The foundry segment is expected to post a $2.4 billion operating loss, with one internal customer making up all of its current production.
The gap between Intel’s stock and fundamentals highlights CEO Lip-Bu Tan’s impact. Tan secured major investments, reacquired a key factory, and announced a new Texas site with Elon Musk’s companies.
The Texas facility is Intel’s biggest win for an external customer. Elon Musk confirmed that the TeraFab complex, which will serve Tesla and SpaceX, will use Intel’s planned 14A process node. The 14A node is expected in 2028, and Musk expects it to mature in time for scaling up.
Getting outside foundry customers is crucial for Intel’s manufacturing plans. Tan has said that funding new manufacturing technology will need outside revenue, so the Tesla deal is an important sign of progress, even if large sales are still years away. Intel’s foundry business is losing money, and its share of data center revenue with Nvidia has dropped from 71% in 2021 to about 7% last year. This shows how much the AI infrastructure boom has left Intel’s current products behind.
Intel’s PC chip business, which analysts expect will make up 57% of first-quarter revenue, is also under pressure. A global memory shortage is raising component costs and hurting demand, so PC sales are expected to fall about 7% from last year.
Intel shares hit a record last week and now trade at about 92 times expected earnings, well above their usual multiple. This suggests investors believe in a long-term turnaround rather than current profits. Thursday’s earnings are an update on this ongoing recovery.
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