What Happened:
Shares of computer processor maker Intel (NASDAQ:INTC) jumped 5.23% in the morning session after the company raised its Q2 2023 revenue guidance to the high end of its previous outlook. This updated view was given at the TD Cowen conference on May 31, 2023. CFO David Zinsner added that "We gave a range of $12 billion plus or minus $500 million, and we think we are on track at $12B-$12.5B as we close out the second quarter." After the initial pop the shares cooled down to $31.26, up 4.19% from previous close.
What is the market telling us:
Intel's shares are not very volatile than the market average and over the last year have had only 14 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business. The previous big move was 2 months ago, when the company gained 6.38% on the news that memory chipmaker, Micron, reported earnings. While the results trailed the consensus estimates for revenue and operating profits, Wall Street analysts noted that the semiconductor company had faced a steeper slump than anticipated, but signs of a rebound are emerging. The outlook from the company was optimistic, with Sanjay Mehrotra, the chief executive, affirming his "confidence" in the long-term demand scenario and envisaging "gradual improvements" in the industry's supply-demand equation. The stock reaction suggests that the market puts more weight on longer-term risk/reward than near-term cyclical results.
Intel is up 16.9% since the beginning of the year, but at $31.26 per share it is still trading 30.3% below its 52-week high of $44.84 from June 2022. Investors who bought $1,000 worth of Intel's shares 5 years ago would now be looking at an investment worth $566.03.
Is now the time to buy Intel? Access our full analysis of the earnings results here, it's free.