Please ensure Javascript is enabled for purposes of website accessibility

Why Intel Stock Rose Today

By Evan Niu, CFA - Apr 22, 2020 at 12:51PM

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

Jefferies boosted its price target, citing strength in the data center business.

What happened

Shares of Intel (INTC 1.46%) have risen today, up by 5% as of 12:15 p.m. EDT, after a Wall Street analyst increased estimates for the chipmaker. Jefferies' Mark Lipacis boosted his price target on the stock from $53 to $62 while reiterating a hold rating.

So what

Lipacis believes that Intel's data center business is enjoying strong demand from hyperscale customers. With the novel coronavirus pandemic causing many people to work from home, demand for data center components that power the cloud is booming. Data center leasing volumes are also high, which should also contribute to better-than-expected sales of data center chips in the first quarter.

Intel chips

Image source: Intel.

Lipacis is modeling for data center group revenue to increase 7% on a sequential basis in the first quarter. That segment generated $7.2 billion in revenue in Q4.

Now what

The analyst expects Intel to beat its first-quarter outlook, which calls for $19 billion in sales. While many tech companies have been updating or withdrawing guidance altogether, Intel did not change its forecast. The company's outlook also calls for adjusted earnings per share of $1.30.

The company suspended its share repurchase program last month in an effort to conserve cash while remaining committed to its dividend payments. Intel reports Q1 results tomorrow, and investors will want to know how the COVID-19 crisis is impacting its various segments. In a recent prospectus, the company warned that COVID-19 could hurt the business, particularly if it causes a broad economic slowdown.

Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool recommends 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
$36.11 (1.46%) $0.52

*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
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/12/2022.

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.