Please ensure Javascript is enabled for purposes of website accessibility

Why Intel's Stock Jumped 8% Today

By Anders Bylund - Oct 25, 2019 at 1:17PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Rumors of the semiconductor market's imminent death were proven to be greatly exaggerated by last night's earnings report.

What happened

Shares of semiconductor leviathan Intel (INTC 0.53%) are surging on Friday, rising as much as 8.1% on heavy trading volume. The surge was triggered by a strong third-quarter earnings report.

So what

Intel's adjusted earnings rose 1% year over year, landing at $1.42 per diluted share. Revenue held perfectly steady at $19.2 billion. The analyst consensus had been calling for earnings near $1.24 per share on sales in the neighborhood of $18.1 billion. Those far too modest analyst targets stuck closely to Intel's own guidance figures, so it looks like the solid performance also caught the company's management by surprise.

Robotic etching tools are turning an unfinished silicon wafer into dozens of computer chips.

Image source: Getty Images.

Now what

Heading into this report, I was concerned that a weak showing from Texas Instruments (TXN 1.19%) earlier this week was pointing to an industrywide swoon with the power to drag Intel down as well. As an Intel shareholder myself, I'm relieved to see that I was very wrong.

"Q3 2019 was the best quarter in our Company's history," CFO Bob Swan said on the earnings call. "We've achieved record revenue both overall and in our data-centric businesses while making continued progress on our strategic priorities. Simply put, our ambitions have never been greater. We are growing share in a large and expanding $300 billion market opportunity, fueled by the exponential growth of data, which is reshaping computing."

I'll just eat my hat and watch my Intel holdings soaring today. TI and Intel are sending mixed messages about the current health of the semiconductor industry, so the rest of this young earnings season should be interesting. As for Intel, the chip giant just reminded us all what a rock-solid blue chip it can be even in these uncertain market conditions.

Anders Bylund owns shares of Intel. The Motley Fool owns shares of Texas Instruments. The Motley Fool recommends Intel and recommends the following options: short January 2020 $50 calls on Intel. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Intel Corporation Stock Quote
Intel Corporation
INTC
$35.97 (0.53%) $0.19
Texas Instruments Incorporated Stock Quote
Texas Instruments Incorporated
TXN
$178.81 (1.19%) $2.10

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
395%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/18/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.