Intel Set To Report Amid New Concerns Of Competition From AMD

Intel Corporation INTC is scheduled to report earnings Thursday, and Matthew Ramsey of Canaccord Genuity expects mixed second-half 2017 results.

He maintains his Hold rating on the stock and has a slightly below-consensus estimate because he sees Intel's PC revenue in modest secular decline and Intel's server growth rate below 10 percent annually.

He estimates Intel's PC sales in 2017 down 0.3 percent and down 3.2 percent in 2018 in a largely flat TAM against new Advanced Micro Devices, Inc. AMD competition. Ramsey expects Data Center Group growth at 6.8 percent in 2017 and 7.9 percent in 2018.

Despite the Hold rating, the analyst sees the Core X-series of desktop processors, first CoffeeLake notebook chips and the Purley/Skylake server platform as impressive. They incrementally expand the breadth of Intel's portfolio at the high end of its served markets, said Ramsey.

He expects H2 2017 results to be stronger than H1 2017, with improved Data Center Group operating margins. Ramsey said that Intel's shares have a strong yield and they are inexpensive, but the recent move higher is premature and the stock could be set for a pullback and remain range bound until investors see proof investments in 10/7nm, FPGAs, auto, IoT and memory will generate strong returns within a reasonable time horizon and margin structure.

Related Link: Stifel: AMD's Q3 Wasn't As Bad As It Seems, But Not As Good As Hoped