Intel heads into its second quarter earnings report on July 23 carrying an unusual problem. Wedbush Securities expects the numbers to look strong.
The firm is far less certain that strong will be enough to move the stock.
In a note to clients, Wedbush analyst Matt Bryson said revenue and margins are set to beat expectations by a wide margin, with a similar setup likely carrying into the third quarter.
He kept a Neutral rating and a $95 price target on Intel. That target sits close to where the stock was already trading heading into the report, which means Wedbush is not calling for meaningful upside even as it predicts a beat.
Intel’s last quarter set a high bar for this one. The company beat Wall Street’s estimates in April, and shares jumped 23.6% the next day as data center revenue climbed 22% year over year, according to Barchart.
Investors have since come to expect similar fireworks every time Intel reports, which raises the stakes for July 23.
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Bryson pointed to Taiwan Semiconductor as the reason for his caution. TSMC posted record profit and raised its full year guidance last week, and the stock still fell as investors booked gains on an already expensive sector after a year of steep gains.
Bryson wrote that even a significant beat with a reacceleration in sales was not enough to stop a broader semiconductor sell-off.
That sell-off has more than one trigger. Chinese startup Moonshot AI released an open weight model called Kimi K3 this month that, according to Fortune, matched or outperformed several leading American AI systems on benchmark tests.
The release rattled chip stocks already nervous about how much of the AI trade is priced for perfection.
Rising US-China tensions and inflation concerns tied to future Federal Reserve policy have added to the unease, according to Bryson.
He believes Intel is better positioned than some peers on the China question, since Chinese firms still need computing power to run models like Kimi even as they build their own.
Growing worries about how quickly hyperscalers will see returns on their data center spending have compounded the pressure. Even so, Bryson argued Intel is more exposed to broad market swings than TSMC or Nvidia because its valuation sits well above historical norms and industry peers.
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Data centers and pricing are carrying the quarter
Bryson expects data center sales to rise 10% sequentially and 40% year over year, driven partly by pricing strength.
Average selling prices climbed by a double digit percentage during the quarter, he wrote in the note. That pricing power matters because it shows Intel can charge more even before its newest chips fully ramp.
Server sales should also benefit as Intel shifts older manufacturing nodes to support that growth while ramping PC chip output on its newer 18A process, which Bryson said is running ahead of his prior estimates.
PC chips and margins point the same direction
Personal computer pricing has stayed firm even though PC sales came in weaker than expected, Bryson wrote.
That trend should continue into the third quarter, making it more likely Intel beats revenue estimates rather than disappoints.
Margins should also come in well ahead of prior expectations because of that same pricing strength, a pattern Bryson expects to persist for several more quarters.
Intel’s stock has already priced in a big recovery
Intel (INTC) has rallied from a 52-week low of $18.97 to roughly $95, according to data from TheStreet, one of the sharpest turnarounds in the S&P 500 this year.
That run makes the stock a different animal than it was a year ago, when a beat alone was enough to move it higher. Now the bar is higher, and Bryson’s own price target reflects that shift.
Options traders are pricing in close to a 15% swing in Intel shares around the report, according to TipRanks.
The average Wall Street price target sits near $107, well above Bryson’s $95. That gap shows he is more guarded than the broader analyst consensus, even while agreeing the quarter itself should look good. Intel also stands to benefit from cost cuts tied to another round of layoffs this year, which Bryson expects to support margins into the third quarter.
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Why I would lean into a dip rather than fear it
Bryson is right that sentiment, not fundamentals, is the wild card here. But I would push back gently on how much weight that risk deserves for Intel specifically.
Its data center and pricing gains are showing up in the numbers because of the 18A ramp and real server share wins, not because the stock is riding a China AI narrative the way TSMC and Nvidia are.
If Intel sells off on the same amorphous fears that hit TSMC, that looks more like a mispricing than a warning sign.
That said, I am not ready to call the valuation cheap. Bryson’s point about Intel trading well above historical norms is fair, and a stock that has gone from $18.97 to $95 in a year can give back ground on a soft market day regardless of what the earnings say.
My read is to let the initial post-earnings swing play out before adding to a position, rather than assume the fundamentals alone will hold the stock up on July 23.
Sentiment over fundamentals
Intel’s setup mirrors what just happened to TSMC, and it points to something larger about this earnings season. Strong fundamentals no longer guarantee a stock gets rewarded, because so much AI optimism is already priced into the sector.
A single headline out of China can now move chip stocks more than a domestic earnings beat can. That dynamic will not disappear once Intel reports on July 23.
Investors watching the results may end up learning less about the company itself than about how fragile the broader AI trade has become.
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