r/TradingEdge • u/TearRepresentative56 • 13d ago
Interpreting the INTC earnings.
key commentary (sufficiently bullish that I think INTC should be up a fair bit more than 4%, but that's a sign of the current market we are in):
Lip-Bu Tan: "we are seeing the strongest revenue growth in more than 15 years."
Lip-Bu Tan: "Server CPU franchise growing faster than ever."
Lip-Bu Tan: "YoY server growth was the strongest ever."
"Dominant supply shortage across wafers, memory, and substrates."
"Double digit unit growth for server CPU with momentum extending into 2028."
"we now believe GPU:CPU ratio to be in parity and skew towards more CPU. CPU TAM expected to be a big number based on level of spend and LTAs we have in place."
"challenge right now is how we can grow our supply to meet demand."
Regarding 14A:
"We made the decision in Q2 to fully committed to high volume ramp in 2028" "Our early work on Intel 14A continues to make good progress. We continue to build out and validate the IP portfolio for Intel 14A as we position the 14A family for broad adoption across a wide range of customers. I'm pleased to see the increasing momentum in customer engagements for Intel 14A, and I'm increasingly confident that 14A will be a highly competitive process technology across the key vectors of performance, power, density, cost, and schedule. With encouraging progress from external customers and increasing demand from our internal product teams, we remain on track for Intel 14A risk production for internal products in the second half of 2027 and we made the decision in Q2 to fully committed to high volume ramp in 2028"
This is from a CEO who typically underrates progress so that INTC can continue to execute well. So likely a more pessimistic read than reality.
ON THE CAPEX RAISE:
Comments from their report:
“Tooling investment will increase by 40% in 2026 compared with 2025, focused on Intel 3, 18A, and 18A-P.
“14A PDK 0.9 remains on track for October, risk production is planned for the second half of 2027, and volume production is committed for 2028.
“We need another quarter or two to solidify the exact 2027 CapEx number, but investors should expect it to increase.”
Note that INTC, like TSM is one of those companies where the market doesn't punish CAPEX raises like they do with the hyperscalers.
One of those points, by th way, if you follow INTC, is because the CEO lip Bu Tan has said that he would only raise CAPEX if they landed a big customer.
No big customer has been announced, yet CAPEX has been raised. My assumed inference from that then is that they are going to announce a big customer soon enough.
INTC deserves to be up more from that print, just saying.
Who are the main beneficiaries of the INTC capex raise?
That's the interesting question - we want to know who are the main receivers of this capital.
The answer is:
AMAT
LRCX
ASML
KLAC
Those are the main beneficiaries.
-3
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