"What's the holy grail of tech? That's when Intel lifts sales, earnings and gross margins because of enterprise demand. Anyone who has followed Intel as long as I have knows that when you get that mid-60s gross margin and more orders than you can handle then the leverage is MONSTROUS and the guidance conservative, simply because it can't keep up with the momentum."
RBC Capital Markets Doug Freedman (Sector Perform, No PT)
"Intel is revising Q2 revenues higher by $700mil (representing an incremental 5.3% of growth) to $13.7bil at the mid-pt, along with GMs driven by better PC volumes (enterprise). We believe at the mid-pts, this suggest $0.52 in EPS vs. cons/$0.47 and RBC/$0.46. In addition, company is raising FY14 revenue guidance for "growth" vs. prior expectation of flat. The positive data points in PCs are encouraging and are in support of commentary we recently heard in Asia at Computex, suggesting that demand is slightly better than feared, with notebooks flat to down single digits for the year and desktop growth roughly flat for 2014."
Morgan Stanley analyst Joseph Moore (Equal-Weight, $28 PT)
"We have seen signs of stronger PC demand over the course of 2q, but are still surprised at the magnitude of upside, with the 2nd best June qtr q/q revenue comparison in a decade and likely over 5% y/y PC unit growth. We still think the stock is expensive on free cash flow, but it's hard to see large underperformance with no imminent negative catalyst."
Canaccord Genuity analyst Matthew Ramsay (Hold, $31 PT)
"Intel updated JuneQ guidance well above the prior revenue range driven by strength in PCCG, particularly enterprise-focused PCs. While these stronger than anticipated trends in
PCCG have proven more sustainable than we had anticipated, we build our long-term investment thesis on unchanged views toward growth prospects in Intel's other businesses. That said, stronger and more sustainable trends in PCCG provide a more firm foundation for and flexibility to those businesses. We adjust our estimates higher to reflect this enterprise PC strength and the positive impact to margins from leverage. We maintain our HOLD rating, but raise our target to $31."
Cantor Fitzgerald analyst Brian White
"Last night, Intel positively pre-announced its June quarter with sales now expected to come in at $13.7 billion (plus or minus $300 million) compared to the company's original revenue outlook range of $13 billion (plus or minus $500 million) and the Street's (FactSet consensus) estimate of $13.02 billion. Last week during our Computex trip, we highlighted improved PC demand at our contacts in Taipei and this also showed up in the stronger-than-seasonal May sales performance for our ODM Barometer this week. In our coverage universe, AU Optronics (33%), LG Display (32%), Hewlett-Packard (30%), Corning (14%), and Apple (12%) have the most exposure to the PC market."
BMO Capital Markets analyst Ambrish Srivastava (Outperform, $33 PT)
"When we had raised our rating on the stock we had highlighted, among other points, that we expected estimates to be revised upward, after many quarters of downward to sideways revisions. Our 2015 estimates have been higher than consensus for some time now. As part of our ongoing Asia trip, we have also picked up that inventory in the PC chain continues to be pretty lean as well, largely due to low expectations for overall demand. Our 2014 and 2015 estimates go up on higher revenues and gross margin, partially offset by higher opex and a higher tax rate. For 2014 EPS goes to $2.02 from $1.87. For 2015 EPS goes to $2.26 from $2.15."
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-- Written by Chris Ciaccia in New York
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